a. Evaluate professional conduct and formulate an appropriate response to actions which violate the CFA Institute Code of Ethics and Standards of Professional Conduct. b. Prepare appropriate policy and procedural changes needed to assure compliance with the Code of Ethics and Standards of Professional Conduct. Q1. Bonnie Tully, CFA, is a supervisor with Bonn Financial Advisors. Tully has been assigned by Bonn’s governing board to design procedures to minimize potential conflicts of interest that can arise during the course of the firm’s business. Specific areas of interest include when the firm’s representatives trade in the same securities as their clients, fair treatment of clients when disseminating recommendations, and ensuring that recommendations to clients are appropriate. All of Bonn’s representatives have a working knowledge of the Code and Standards, so the goal is for Tully to lay out the details for compliance. Tully has generated a list of eight specific goals she feels are the most important. 1) | Creating guidelines for representatives when they trade for their own account. | 2) | Defining material, nonpublic information. | 3) | Drafting a common investment policy statement that representatives must sign and apply to all clients. | 4) | Creating guidelines for the use of nonpublic information concerning a tender offer. | 5) | Developing an effective means for disclosure to clients information regarding relationships between Bonn and its representatives and corporations whose securities are being recommended by Bonn. | 6) | Drafting a written policy on soft dollars. | 7) | Creating guidelines on how to treat gifts and benefits from external sources to representatives. | 8) | Creating a restricted list of publicly traded companies. |
The governing board of Bonn has asked Tully to examine and comment on two current situations. The first situation concerns Midland Investment Banking (MIB), a subsidiary of Bonn Financial. MIB has issued a prospectus for its open-end Midland Gold Fund. In the prospectus, the investment policy was disclosed as, "We will maintain an investment posture of 50 percent or more in gold stocks and/or bullion, depending upon market conditions." This policy was adhered to until the price of gold fell by 20 percent, leaving the fund 40 percent invested in gold stocks and bullion. MIB Management has decided that since the allocation was effected by market conditions, no action—either to change the investment policy or to rebalance the portfolio—is required on their part. The second situation concerns Toby Waller, CFA, who is an employee of Bonn Financial. Bonn is a major shareholder in Stepp Company. Stepp appears likely to be the target of a tender offer from Joshua Manufacturing. Stepp Shareholders have been asked to vote on whether to implement a “poison pill” that would effectively prevent any merger or buy-out. Prior to the vote, Waller receives a phone call from Joshua Manufacturing’s director of corporate communications, Danielle Jones. Jones offers to pay Waller’s airfare and hotel expenses so that he can attend a dinner meeting at Joshua’s headquarters in Philadelphia. At this meeting the firm’s CEO and General Counsel plan to explain their position on the offer and answer questions. In the meantime, Stepp’s management has announced that it will hold a half-day seminar for analysts and major shareholders, where its attorneys and industry experts will discuss management’s reasons for promoting the “poison pill.” Lunch will be provided to all attendees, and Waller’s office is close to Stepp’s headquarters so he can easily attend the meeting. Which of the following items from Tully’s list of eight goals will probably require the least amount of effort to complete? A) #1. B) #3. C) #4.
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发表于 2009-1-7 09:16
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