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..... |