CFA Practice Question

CFA Practice Question

JDM & Associates, an investment counseling firm, has a policy that any employee who purchases or sells the securities of a company he or she covers must give clients the opportunity to act first if the employee's transaction amount exceeds $1,000. With regard to the Standards of Professional Conduct, this policy is ______
A. in conformity, because customers and clients are treated fairly in the eventual dissemination of the investment recommendation.
B. in conformity, because a basis for giving clients priority is provided in the policy.
C. not in conformity, because no minimum dollar amount should be stated.
Explanation: This question relates to conformity with Standard VI (B) - Priority of Transactions. Transactions for clients and employers always have priority over transactions in securities or other investments of which a member is the beneficial owner so that such personal transactions do not operate adversely on clients' or employers' interests. No dollar amount is relevant.

User Contributed Comments 6

User Comment
shasha CFAI sets principals and leave operation procedure's details for individual organizations. Could we think it's not in conformity if any organization put more compliance terms besides CFAI's request?
rainbowsoda CFAI is more strict.
ontrack make that most:)
cong The duty to clients and employer has priority over self-interest.
Insipidity Code of ethics : Subordinate personal interests.
smettias I PICKED C AND THE ANSWER IS C BUT IT SAYS I GOT IT WRONG?? EXPLAINN.....
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