I can't understand No.16 in CFAI MOCK, morning session.
what does 'precleared transactions are approved only for that trading day' mean?
also, why purchase after receiving prior clearance violated her employer's compliance procedures?作者: RobertA 时间: 2011-7-11 18:22
i assume you are talking about preclearance of transactions that can potentiallly have a conflict of interest.作者: kmf229 时间: 2011-7-11 18:22
No...
If I remember correctly from that question, the employer had a specified precleared transactions allowed for EACH day...and the investor went over the specified limit...and hence made a violation....
I'm not sure if I remember entirely but I'm fairly confident this is what you are referring to作者: Finalnub 时间: 2011-7-11 18:22
thanks all, i read the question again, and since pre cleared transactions are approved only for that trading day, the employee not only exceed the limit but also make the transaction two days after she received prior clearance, am i right?
P.S: I'm not a professional so i don't understand what exactly preclearance is, is it some kind of permission for personal investment?作者: waldziuchna 时间: 2011-7-11 18:22
Hi Steph,
When I was working at JP Morgan we had to go through a pre clearance process. Essentially, employees are required to send a request for approval to trade a stock. Turnabout was roughly 2 -4 hours. I'm not sure about what their internal controls or measures are since it east my department. The reason employees needed to go through preclearance was to create barriers to insider trading. As an accountant, I would be responsible for reconciling trades that would occur the following day. Which is material nonpublic information.
