does anyone remember the directives regarding principal vs agency trades under the soft dollar standards? I just vaguely remember there was some provision on that but cannot find it. anyone can tell from top of their head? thanks
danny’s not here anymore mrs torrence… you’re supposed to treat them the same sort of way- so if you’re doing on principal basis and you’re getting some sort of spread instead of commission, supposed to look at that and make sure it’s fair if you’re paying up on spread just like if you were paying up with commission $$'s.
I think soft dollars from principal trades can be used to benefit accounts other than the clients, provided prior consent has been obtained from the client. I believe this is not allowed for Agency trades
I wasn’t sure of the second part, so I double checked with Schweser: (1) It is permissible to use client brokerage from agency trades to obtain research which may not directly benefit the client. Over time, however, the client should receive a benefit from the research. (2) As long as no fiduciary regulations apply, it is permissible to use client brokerage obtained from principal trades to benefit other client accounts, as long as this is disclosed to the client and prior consent is receiv
actually…i think it’s the other way around
^^…oops a bit late
^ yes this is true. In the case of principal trades not subject to other fiduciary regulations, the research may benefit other client accounts, as long as disclosure is made to the client and prior permission is received. also- It is permissible to use “client brokerage” from agency trades to obtain research which may not directly benefit the client. Over time, however, the client should receive a benefit from the research.
thanks - that’s what I was after
for agency trades the soft dollar benefits (eg research) need not benefit client at that particular time but it should benefit client over a reasonable period of time.
random ethics q- you don’t think they’ll get so crazy as to ask in ROS’s about quiet periods do you? it’s like a month before IPO’s and some time after and for secondaries like 10 days or something… i was reading ethics yesterday afternoon in the car ride home and for a few pages it seemed like every other line was some stupid quiet period all for different amounts of days. i wasn’t loving the details.
bannisja Wrote: ------------------------------------------------------- > ^ yes this is true. > > In the case of principal trades not subject to > other fiduciary regulations, the research may > benefit other client accounts, as long as > disclosure is made to the client and prior > permission is received. > > also- > > It is permissible to use “client brokerage” from > agency trades to obtain research which may not > directly benefit the client. Over time, however, > the client should receive a benefit from the > research. rememeber though … all this can be overriden by the local law. Be wary of this trick in the question. I fell for it …
I am sparing myself this level of details - I hope they won’t test it. Having said that… let’s check… because once you say the above YOU KNOW they will test it OK - I found that restricted periods should be 30 calendar days before and 5 calendar days after the report is issued
any other restricted periods?
deep2002 Wrote: ------------------------------------------------------- > any other restricted periods? I think quiet period is 30 days before for an IPO and 10 days before for a secondary offering. can anyone confirm… dont have the notes
“Quiet periods of 30 calendar days from issuance for IPOs and at least 10 calendar days from issuance for secondary offerings are recommended” verbatium - CFAI V1 Pg 149
also… “It is recommended that covered employees be required to hold securities for a minimum of 60 calendar days, except in the case of extreme financial hardship.” ROS - Personal Investments and Trading. CFAI V1. Pg 151
and you should never act opposite to what you recommend you = analyst
Dude, you read in the car? I hope you have a driver?
i have a bumpersticker that says “THE CODE OF ETHICS IS MY COPILOT” my friend was driving- had a 5 hr car ride- did a BSAS AM test the way there… way home was hurting a bit more… could only read like 5 pgs a time of ethics. good times. this is a good thread on ethics. feel free anyone to just drop in random ethical tidbits. i prob will remember them here, where as reading them in the text it doesn’t stick as well.
Dont laugh but whats the difference b/w and agency trade and a principle trade? I believe principle is the client? What about agency?