Again, the one nuance is if you’re being offered gifts from clients
Gifts from your clients must be disclosed to the employer. The nuance I was writing about. These can be viewed as informal bonuses. The direct text from CFA:
“Receiving a gift, benefit, or consideration from a client can be distinguished from gifts given by entities seeking to influence a member or candidate to the detriment of other clients. In a client relationship, the client has already entered some type of compensation arrangement with the member, candidate, or his or her firm. A gift from a client could be considered supplementary compensation. The potential for obtaining influence to the detriment of other clients, although present, is not as great as in situations where no compensation arrangement exists. When possible, prior to accepting “bonuses” or gifts from clients, members and candidates should disclose to their employers such benefits offered by clients. If notification is not possible prior to acceptance, members and candidates must disclose to their employer benefits previously accepted from clients. Disclosure allows the employer of a member or candidate to make an independent determination about the extent to which the gift may affect the member’s or candidate’s independence and objectivity.”
This is not a client scenario. This is a public company covered by the brokerage firm. As such, it falls under this part of I(B) which has no mandatory gift disclosure language whatsoever:
“External sources may try to influence the investment process by offering analysts and portfolio managers a variety of benefits. Corporations may seek expanded research coverage, issuers and underwriters may wish to promote new securities offerings, brokers may want to increase commission business, and independent rating agencies may be influenced by the company requesting the rating. Benefits may include gifts, invitations to lavish functions, tickets, favors, or job referrals. One type of benefit is the allocation of shares in oversubscribed IPOs to investment managers for their personal accounts. This practice affords managers the opportunity to make quick profits that may not be available to their clients. Such a practice is prohibited under Standard I(B). Modest gifts and entertainment are acceptable, but special care must be taken by members and candidates to resist subtle and not-so-subtle pressures to act in conflict with the interests of their clients. Best practice dictates that members and candidates reject any offer of gift or entertainment that could be expected to threaten their independence and objectivity.”
So - S2000 correctly points out - if there is a token gift by a “client” then I guess you have to disclose it now. Please disregard my prior points. But in this case, it’s not a client. You don’t have to disclose it. The CFA likes to play these little games. Chances are, token gift means no disclosure. If it’s a client, then I guess you technically do! I learned something here too.
Long story short - in this fact pattern, there is no required disclosure. If it was a different specific scenario where someone you manage money for gave you the hat instead, well, looks like you DO need to disclose that cheap hat! Wow.