- CFA Exams
- CFA Level I Exam
- Topic 10. Ethical and Professional Standards
- Learning Module 3. Guidance for Standards I-VII
- Subject 19. Standard VI (B) Priority of Transactions
CFA Practice Question
The main purpose and scope of Standard VI (B) Priority of Transactions is to make sure that members do not ______.
B. give preferential treatment to larger clients
C. benefit themselves ahead of their customers or employers
A. disseminate investment recommendations to larger clients ahead of smaller clients
B. give preferential treatment to larger clients
C. benefit themselves ahead of their customers or employers
Correct Answer: C
This standard is designed to prevent any potential conflict of interest or the appearance of a conflict of interest. A member may only undertake personal transactions once they have given their clients the opportunity to act on a security. Personal trading includes the member's own account, family members's accounts and accounts where the member has a direct interest.
Although the statements "give preferential treatment to larger clients" and "disseminate investment recommendations to larger clients ahead of smaller clients" are correct, they do not describe the main purpose and scope of this standard.
User Contributed Comments 6
| User | Comment |
|---|---|
| danlan2 | A and B are for Fair Dealing. |
| sunilcfa | How? fair dealing requires equal opportunity to all clients |
| sunilcfa | oh got it :) |
| Oarona | tricky |
| viruss | yes I think the problem in the exam will be the distinction between several substandards that are linked but different according to standard related ... fair dealing vs priority of transaction ; etc. |
| tybe0012 | Don't be a self iinterested **** |