- CFA Exams
- CFA Level I Exam
- Topic 10. Ethical and Professional Standards
- Learning Module 71. Guidance for Standards I-VII
- Subject 5. Standard II (A) Material Nonpublic Information
CFA Practice Question
Which of the following are appropriate procedures for handling insider information inside a firm?
II. monitor employee trading when in possession of sensitive information
III. limit the number of employees with access to the information
I. control information flow between departments
II. monitor employee trading when in possession of sensitive information
III. limit the number of employees with access to the information
A. II and III
B. I and III
C. I, II and III
User Contributed Comments 5
| User | Comment |
|---|---|
| prajacti | shouldn't II read "disallow employee trading" rather than just "monitor"? i.e. restricted lists etc? i chose option B due to this |
| charlie | you cannot really disallow - employees can still trade these stocks but their activities should be monitored. |
| toxoplasmosis | That's right.The activity should actually be monitored. |
| tylaw | This is a tricky question. I agree the trading should not be allowed. This web site's calling card is its trick questions. |
| Shaan23 | Proprietary trading should NOT be ceased when material nonpublic material released ... therefor monitored. |