Members and candidates should make reason- able efforts to understand the applicable laws—both country and regional—for the countries and regions where their investment products are developed and are most likely to be distributed to clients.
Legal counsel. When in doubt about the appropriate action to undertake, it is recommended that a member or candidate seek the advice of compli- ance personnel or legal counsel concerning legal requirements.
When dissociating from an activity that violates the Code and Standards, members and candidates should document the violation and urge their firms to attempt to persuade the perpetrator s to cease such conduct. To dissociate from the conduct, a member or candidate may have to resign his or her employment.
The formality and complexity of compliance procedures for firms depend on the nature and size of the organization and the nature of its investment operations.
Members and candidates should encourage their supervisors or managers to adopt a code of ethics. Information sources might include primary information developed by the relevant government, governmental agencies, regulatory organizations, licensing agencies, and professional associations e. Comment: Although it is recommended that members and candidates seek the advice of legal counsel, the reliance on such advice does not absolve a member or candidate from the requirement to comply with the law or regulation.
Allen should report this situation to his supervisor, seek an independent legal opinion, and determine whether the regulator should be notified of the error. Brown discovers that the Courtney Company has concealed severe third-quarter losses in its foreign operations. The preliminary prospectus has already been distributed. Comment: Knowing that the preliminary prospectus is misleading, Brown should report his findings to the appropriate supervisory persons in his firm.
Brown should also seek legal advice to determine whether additional reporting or other action should be taken. Washington discovers, however, that the composite omits the performance of accounts that have left the firm during the year period, whereas the description of the composite indicates the inclusion of all firm accounts. This omission has led to an inflated perfor- mance figure. Washington is asked to use promotional material that includes the erroneous performance number when soliciting business for the firm.
Comment: Misrepresenting performance is a violation of the Code and Standards. Although she did not calculate the performance herself, Washington would be assisting in violating Standard I A if she were to use the inflated performance number when soliciting clients. She must dissociate herself from the activity. If discussing the misleading number with the person responsible is not an option for correcting the problem, she can bring the situation to the attention of her supervisor or the compliance department at her firm.
If the firm insists that she use the material, she should consider whether her obligation to dissociate from the activity requires her to seek other employment. He works in a developing country with a rapidly modernizing economy and a growing capital market.
Local securities laws are minimal—in form and content—and include no punitive prohibitions against insider trading. Comment: Collins must abide by the requirements of the Codes and Standards that might be more strict than the rules of the developing country. He should be aware of the risks that a small market and the absence of a fairly regulated flow of information to the market represent to his ability to obtain information and make timely judgments.
He should include this factor in formulating his advice to clients. In handling material nonpublic information that accidentally comes into his posses- sion, he must follow Standard II A —Material Nonpublic Information.
Jameson lives and works as a registered investment adviser in the tiny, but wealthy, island nation of Karramba. Jameson, believ- ing that as a U. In addition, Jameson believes that, as a charterholder, as long as she adheres to the Code and Standards requirement that she disclose her participation in any IPO to her employer and clients when such ownership creates a conflict of interest, she is meeting the highest ethical requirements.
Comment: Jameson is in violation of Standard I A. As a registered investment adviser in Karramba, Jameson is prevented by Karrambian securities law from participating in IPOs regardless of the law of her home country.
In addition, because the law of the country where she is working is stricter than the Code and Standards, she must follow the stricter requirements of the local law rather than the requirements of the Code and Standards. Example 6 Laws and Regulations Based on Religious Tenets : Amanda Janney is employed as a fixed-income portfolio manager for a large inter- national firm.
The marketing and promotional materials for the fixed-income hedge fund do not specify whether or not the fund is a suitable investment for an investor seeking compliance with Islamic law. Because the fund is being distributed globally, Janney is concerned about the reputation of the fund and the firm and believes disclosure of whether or not the fund complies with Islamic law could help minimize potential mistakes with placing this investment.
Comment: As the financial market continues to become globalized, members and candidates will need to be aware of the differences between cultural and religious laws and requirements as well as the different governmental laws and regulations.
Janney and the firm could be proactive in their efforts to acknowledge areas where the new fund may not be suitable for clients. Example 7 Reporting Potential Unethical Actions : Krista Blume is a junior portfolio manager for high-net-worth portfolios at a large global investment manager. She observes a number of new portfolios and relation- ships coming from a country in Europe where the firm did not have previous business and is told that a broker in that country is responsible for this new business.
At a meeting on allocation of research resources to third-party research firms, Blume notes that this broker has been added to the list and is allocated payments for research. And she has not seen any research come from this broker. Blume asks her supervisor about the name being on the list and is told that someone in marketing is receiving the research and that the name being on the list is OK. She believes that what is going on may be that the broker is being paid for new business through the inappropriate research payments and wishes to dissociate from the misconduct.
She should communicate her concerns appropriately while advocating for disclosure between the new broker relationship and the research payments. Every member and candidate should endeavor to avoid situations that could cause or be perceived to cause a loss of independence or objectivity in recommending investments or taking investment action. External sources may try to influence the investment process by offering analysts and portfolio managers a variety of benefits.
Corporations may seek expanded research coverage; issuers and underwriters may wish to promote new securities offerings; brokers may want to increase commission business; and independent rating agencies may be influenced by the company request- ing the rating.
Benefits may include gifts, invitations to lavish functions, tickets, favors, or job referrals. One type of benefit is the allocation of shares in oversubscribed IPOs to investment managers for their personal accounts. This practice affords managers the opportunity to make quick profits that may not be available to their clients.
Such a practice is prohibited under Standard I B. Modest gifts and entertainment are acceptable, but special care must be taken by members and candidates to resist subtle and not-so-subtle pressures to act in conflict with the interests of their clients.
Best practice dictates that members and candidates reject any offer of gift or entertainment that could be expected to threaten their independence and objectivity. In a client relationship, the client has already entered some type of compensation arrangement with the member, candidate, or his or her firm.
A gift from a client could be considered supplementary compensation. The potential for obtaining influ- ence to the detriment of other clients, although present, is not as great as in situations where no compensation arrangement exists.
If notification is not possible prior to acceptance, members and candidate must disclose to their employers benefits previously accepted from clients. Members and candidates may also come under pressure from their own firms to, for example, issue favorable research reports or recommendations for certain companies with potential or continuing business relationships with the firm.
Members and candidates acting in a sales or marketing capacity must be especially mindful of their objectivity in promoting appropriate investments for their clients.
Left unmanaged, pressures that threaten independence place research analysts in a difficult position and may jeopardize their ability to act independently and objectively. One of the ways that research analysts have coped with these pressures in the past is to use subtle and ambiguous language in their recommendations or to temper the tone of their research reports. Members and candidates are personally responsible for maintaining independence and objectivity when preparing research reports, making investment recommendations, and taking investment action on behalf of clients.
Members and candidates also should be aware that some of their professional or social activities within CFA Institute or its member societies may subtly threaten their independence or objectivity. When seeking corpo- rate financial support for conventions, seminars, or even weekly society luncheons, the members or candidates responsible for the activities should evaluate both the actual effect of such solicitations on their independence and whether their objectivity might be perceived to be compromised in the eyes of their clients.
One source of pressure on sell-side analysts is buy-side clients. Institutional clients are traditionally the primary users of sell-side research, either directly or with soft dollar brokerage. Portfolio managers may have significant positions in the security of a company under review. Consequently, some portfolio managers implicitly or explicitly support sell-side ratings inflation. Portfolio managers have a responsibility to respect and foster the intellectual honesty of sell-side research.
Therefore, it is improper for portfolio managers to threaten or engage in retaliatory practices, such as reporting sell-side analysts to the covered company in order to instigate negative corporate reactions. Although most portfolio managers do not engage in such practices, the perception by the research analyst that a reprisal is possible may cause concern and make it difficult for the analyst to maintain independence and objectivity.
Fund Manager Relationships. Research analysts are not the only peo- ple who must be concerned with maintaining their independence. Mem- bers and candidates who are responsible for hiring and retaining outside managers should not accepts gifts, entertainment, or travel funding that may be perceived as impairing their decisions. The use of secondary fund managers has evolved into a common practice to manage specific asset allocations. Both the primary and secondary fund managers often arrange educational and marketing events to inform others about their business strategies or investment process.
Members and candidates must review the merits of each offer individually in determining whether they may attend yet maintain their independence. Investment Banking Relationships. Some sell-side firms may exert pressure on their analysts to issue favorable research reports on current or prospec- tive investment banking clients.
For many of these firms, income from investment banking has become increasingly important to overall firm profitability because brokerage income has declined as a result of price competition. Consequently, firms offering investment banking services work hard to develop and maintain relationships with investment banking clients and prospects.
In other countries, because of past abuses in managing the obvious conflicts of interest, regulators have established clear rules prohib- iting the interaction of these groups. Although collaboration between research analysts and investment banking colleagues may benefit the firm and enhance market efficiency e. Having analysts work with investment bankers is appropriate only when the con- flicts are adequately and effectively managed and disclosed. Firm managers have a responsibility to provide an environment in which analysts are neither coerced nor enticed into issuing research that does not reflect their true opinions.
Firms should require public disclosure of actual conflicts of interest to investors. Members, candidates, and their firms must adopt and follow perceived best practices in maintaining independence and objectivity in the corporate culture and protecting analysts from undue pressure by their investment banking colleagues.
A key element of an enhanced firewall is separate reporting structures for personnel on the research side and personnel on the investment banking side. For example, investment banking personnel should not have any authority to approve, disapprove, or make changes to research reports or recommendations. Another element should be a compensation arrangement that minimizes the pressures on research analysts and rewards objectivity and accuracy.
Compensation arrangements should not link ana- lyst remuneration directly to investment banking assignments in which the analyst may participate as a team member. Firms should also regularly review their policies and procedures to determine whether analysts are adequately safeguarded and to improve the transparency of disclosures relating to conflicts of interest.
The highest level of transparency is achieved when disclosures are prominent and specific rather than marginalized and generic. Public Companies. Analysts may be pressured to issue favorable reports and recommendations by the companies they follow. Although few companies engage in such behavior, the percep- tion that a reprisal is possible is a reasonable concern for analysts.
This concern may make it difficult for them to conduct the comprehensive research needed to make objective recommendations. Credit Rating Agency Opinions. Credit rating agencies provide a service by grading the fixed-income products offered by companies. Analysts face challenges related to incentives and compensation schemes that may be tied to the final rating and successful placement of the product.
Members and candidates employed at rating agencies should ensure that procedures and processes at the agencies prevent undue influences from a sponsoring company during the analysis. The work of credit rating agencies also raises concerns similar to those inherent in investment banking relationships. Analysts may face pressure to issue ratings at a specific level because of other services the agency offers companies, namely, advising on the development of structured products.
The rating agencies need to develop the necessary firewalls and protections to allow the independent operations of their different business lines. When using information provided by credit rating agencies, members and candidates should be mindful of the potential conflicts of interest.
And because of the potential conflicts, members and candidates may need to independently validate the rating granted. Issuer-Paid Research. In light of the recent reduction of sell-side research coverage, many companies, seeking to increase visibility both in the finan- cial markets and with potential investors, have hired analysts to produce research reports analyzing their companies. These reports bridge the gap created by the lack of coverage and can be an effective method of commu- nicating with investors.
Depending on how the research is written and distributed, investors may be misled into believing that the research is from an independent source when, in reality, it has been paid for by the subject company. Members and candidates must adhere to strict standards of conduct that govern how the research is to be conducted and what disclosures must be made in the report.
Analysts must engage in thorough, independent, and unbiased analysis and must fully disclose potential conflicts of interest, including the nature of their compensation. Otherwise, analysts risk mis- leading investors. Investors need clear, credible, and thorough information about compa- nies, and they need research based on independent thought. Analysts must exercise diligence, independence, and thoroughness in conducting their research in an objec- tive manner.
Analysts must distinguish between fact and opinion in their reports. Conclusions must have a reasonable and adequate basis and must be supported by appropriate research. Independent analysts must also strictly limit the type of compensation that they accept for conducting issuer-paid research. Otherwise, the content and conclusions of the reports could reasonably be expected to be deter- mined or affected by compensation from the sponsoring companies.
Com- pensation that might influence the research report could be direct, such as payment based on the conclusions of the report, or indirect, such as stock warrants or other equity instruments that could increase in value on the basis of positive coverage in the report.
In such instances, the independent analyst has an incentive to avoid including negative information or making negative conclusions. Best practice is for independent analysts, prior to writing their report, to negotiate only a flat fee for their work that is not linked to their conclusions or recommendations. Travel Funding. The benefits related to accepting paid travel extend beyond the cost savings to the member or candidate, such as the chance to talk exclusively with the executives of a company.
The problem is that members and candidates may be influenced by these discussions when flying on a corporate or chartered jet. Best practice dictates that members and candidates always use commercial transportation rather than accept paid travel arrangements from an outside company. Should commercial transportation be unavailable, members and candidates may accept mod- estly arranged travel to participate in appropriate information-gathering events, such as a property tour.
Firms should also design compensation systems that protect the integrity of the investment decision process by maintaining the independence and objectivity of analysts.
No corporate issuer should reimburse members or candidates for air transportation. Members and candidates should encourage issuers to limit the use of corporate aircraft to situa- tions in which commercial transportation is not available or in which efficient movement could not otherwise be arranged. Members and candidates should take particular care that when frequent meetings are held between an individual issuer and an individual member or candi- date, the issuer should not always host the member or candidate.
Standard I B does not preclude customary, ordinary business-related entertainment as long as its pur- pose is not to influence or reward members or candidates. Firms should consider a strict value limit for acceptable gifts that is based on the local or regional customs and should address whether the limit is per gift or an aggregate annual value.
Firms should require prior approval for employee participation in IPOs, with prompt disclosure of investment actions taken following the offering. Strict limits should be imposed on investment personnel acquiring securities in private placements. Application of the Standard Example 1 Travel Expenses : Steven Taylor, a mining analyst with Bron- son Brokers, is invited by Precision Metals to join a group of his peers in a tour of mining facilities in several western U.
The company arranges for chartered group flights from site to site and for accommodations in Spartan Motels, the only chain with accommodations near the mines, for three nights. Comment: The policy of the company where Adams works complies closely with Standard I B by avoiding even the appearance of a conflict of interest, but Taylor and the other analysts were not necessarily violating Standard I B.
In this example, the trip was strictly for business and Taylor was not accepting irrelevant or lavish hospitality. The itinerary required chartered flights, for which analysts were not expected to pay.
The accommodations were modest. In the final analysis, members and candidates should consider both whether they can remain objective and whether their integrity might be perceived by their clients to have been compromised.
Fritz needs to produce a report right away and is concerned about issuing a less-than-favorable rating. Any pressure from other divisions of his firm is inappropriate.
Her compensation is closely linked to the performance of the corporate bond department. Salespeople have asked her to contact large clients to push the bonds. Comment: Unethical sales practices create significant potential violations of the Code and Standards. In this case, Warner must refuse to push the Milton bonds unless she is able to justify that the market price has already adjusted for the operating problem. Example 6 Research Independence and Prior Coverage : Jill Jorund is a securities analyst following airline stocks and a rising star at her firm.
He tells Jorund that under no circumstances should the prevailing buy recommendation be changed. Comment: Jorund must be independent and objective in her analysis of International Airlines. Jorund must issue only recommendations that reflect her independent and objective opinion.
Example 7 Gifts and Entertainment from Related Party : Edward Grant directs a large amount of his commission business to a New York—based brokerage house. In appreciation for all the business, the brokerage house gives Grant two tickets to the World Cup in South Africa, two nights at a nearby resort, several meals, and transportation via limousine to the game. Grant fails to disclose receiving this package to his supervisor.
Comment: Grant has violated Standard I B because accepting these substantial gifts may impede his independence and objectivity. Every member and candidate should endeavor to avoid situations that might cause or be perceived to cause a loss of independence or objectivity in recommending investments or taking investment action.
By accepting the trip, Grant has opened himself up to the accusation that he may give the broker favored treatment in return.
Green achieves an annual return for Knowlden that is consistently better than that of the benchmark she and the client previously agreed to. Green discloses this gift to her supervisor at Tisbury. Best practices for monitoring include comparing the transaction costs of the Knowlden account with the costs of other accounts managed by Green and other similar accounts within Tisbury.
The supervisor could also compare the performance returns with the returns of other clients with the same mandate. This comparison will assist in determining whether a pattern of favoritism by Green is disadvantaging other Tisbury clients or the possibility that this favoritism could affect her future behavior.
The trip was one of several conducted by the Pension Investment Academy, which had arranged the itinerary of meetings with economic, government, and corporate officials in major cities in several Asian countries. The Pension Investment Academy obtains support for the cost of these trips from a number of investment managers, including Penguin Advisors; the Academy then pays the travel expenses of the various pension plan managers on the trip and provides all meals and accommodations.
The president of Penguin Advisors was also one of the travelers on the trip. Even if his actions were not in violation of Standard I B , Wayne should have been sensitive to the public perception of the trip when reported in the newspaper and the extent to which the subjective elements of his decision might have been affected by the familiarity that the daily contact of such a trip would encourage. This advantage would probably not be shared by firms competing with Penguin Advisors.
Example 10 Research Independence and Compensation Arrangements : Javier Herrero recently left his job as a research analyst for a large investment adviser. While looking for a new position, he was hired by an investor- relations firm to write a research report on one of its clients, a small educa- tional software company. The investor-relations firm hopes to generate investor interest in the technology company.
Comment: If Herrero accepts this payment arrangement, he will be in violation of Standard I B because the compensation arrangement can reasonably be expected to compromise his independence and objectiv- ity.
Herrero will receive a bonus for attracting investors, which provides an incentive to draft a positive report regardless of the facts and to ignore or play down any negative information about the company.
Herrero should accept only a flat fee that is not tied to the conclusions or recommendations of the report. Issuer-paid research that is objective and unbiased can be done under the right circumstances as long as the analyst takes steps to maintain his or her objectivity and includes in the report proper disclosures regarding potential conflicts of interest.
Example 11 Recommendation Objectivity and Service Fees : Two years ago, Bob Wade, trust manager for Central Midas Bank, was approached by Western Funds about promoting its family of funds, with special interest in the service-fee class of funds.
To entice Central to promote this class, Western Funds offered to pay the bank a service fee of 0. The manager completed the normal due diligence review and determined that the new funds were fairly valued in the market with fee structures on a par with competitors.
Now, two years later, the funds managed by Western begin to under- perform their peers. Comment: Wade is violating Standard I B because the fee arrangement has affected the objectivity of his recommendations. Example 12 Recommendation Objectivity : Bob Thompson has been doing research for the portfolio manager of the fixed-income department. His assignment is to do sensitivity analysis on securitized subprime mort- gages. He has discussed with the manager possible scenarios to use to calculate expected returns.
Thompson is concerned with the significant appre- ciation experienced over the previous five years as a result of the increased availability of funds from subprime mortgages. Thompson insists that the analysis should include a scenario run with negative 10 percent for the first year, negative 5 percent for the second year, and then to project a worst- case scenario 0 percent for Years 3 through 5.
The manager replies that these assumptions are too dire because there has never been a time in their available database when HPA was negative. Thompson conducts his research to better understand the risks inherent in these securities and evaluates these securities in the worst-case scenario, an unlikely but possible environment. Based on the results of the enhanced scenarios, Thompson does not recommend the purchase of the securitiza- tion.
The following year, the housing market collapses. Investors must be able to rely on the statements and information provided to them by those with whom the investors have trusted their financial well-being. Investment professionals who make false or misleading statements not only harm investors but also reduce the level of investor confidence in the investment profession and threaten the integrity of capital markets as a whole.
A misrepresentation is any untrue statement or omission of a fact or any statement that is otherwise false or misleading. Written materials include, but are not limited to, research reports, underwriting documents, company financial reports, market letters, newspa- per columns, and books. Electronic communications include, but are not limited to, internet communications, webpages, chat rooms, and e-mails.
Members and candidates who use webpages should regularly monitor mate- rials posted on the site to ensure that the site contains current information. The omission of a fact or outcome has increased in importance because of the growing use of technical analysis. Many members and candidates rely on models to scan for new investment opportunities, to develop investment vehicles, and to produce investment recommendations and ratings.
The omission from the analysis of potentially negative outcomes or of levels of risk outside the norm may misrepresent the true economic value of the investment. Impact on Investment Practice. Members and candidates must not misrep- resent any aspect of their practice, including but not limited to their qualifications or credentials, the qualifications or services provided by their firm, their performance record and the record of their firm, and the charac- teristics of an investment.
Members and candidates should exercise care and diligence when incorporating third-party information. Although the level of involvement of outside managers may change over time, appropriate disclosures by members and candidates are important to avoiding misrepresentations, especially if the primary activity is to invest directly with a single external manager.
Standard I C prohibits members and candidates from guaranteeing clients any specific return on volatile investments. Most investments contain some element of risk that makes their return inherently unpredictable.
For these investments, guaranteeing either a particular rate of return or a guaran- teed preservation of investment capital e. Standard I C does not prohibit members and candidates from providing clients with information on investment products that have guarantees built into the structure of the product itself or for which an institution has agreed to cover any losses.
Standard I C also prohibits plagiarism in the preparation of material for distribution to employers, associates, clients, prospects, or the general public.
Plagiarism is defined as copying or using in substantially the same form materials prepared by others without acknowledging the source of the material or identifying the author and publisher of such material. Members and candidates must not copy or represent as their own original ideas or material without permission and must acknowledge and identify the source of ideas or material that is not their own.
Through various publications and presentations, the investment professional is constantly exposed to the work of others and to the temptation to use that work without proper acknowledgment.
Misrepresentation through plagiarism in investment management can take various forms. This action is a clear violation of Standard I C. In the case of distributing third-party, outsourced research, members and candidates may use and distribute these reports as long as they do not represent themselves as the authors of such a report.
Indeed, the member or candidate may add value for the client by sifting through research and repackaging it for clients. In such cases, clients should be fully informed that they are paying for the ability of the member or candidate to find the best research from a wide variety of sources.
Members and candidates must not misrepresent their abilities, the extent of their expertise, or the extent of their work in a way that would mislead their clients or prospective clients.
This allows clients to understand who has the expertise behind the report or if the work is being done by the analyst, other members of the firm, or an outside party. One of the most egregious practices in violation of this standard is the preparation of research reports based on multiple sources of information without acknowledging the sources.
Examples of information from such sources include ideas, statistical compilations, and forecasts combined to give the appearance of original work. Although there is no monopoly on ideas, members and candidates must give credit where it is clearly due. Sources must be revealed to bring the responsibility directly back to the author of the report or the firm involved. Work Completed for Employer. The preceding paragraphs address actions that would constitute a violation of Standard I C.
In some situations, however, members or candidates may use research conducted or models developed by others within the same firm without committing a violation. The most common example relates to the situation in which one or more of the original analysts is no longer with the firm. Research and models developed while employed by a firm are the property of the firm. The firm retains the right to continue using the work completed after a member or candidate has left the organization.
The firm may issue future reports without providing attribution to the prior analysts. A member or candidate cannot, however, reissue a previously released report solely under his or her name. Recommended Procedures for Compliance Factual presentations. Firms can also help prevent misrep- resentation by specifically designating which employees are authorized to speak on behalf of the firm.
Whether or not the firm provides guidance, members and candidates should make certain that they understand the services the firm can perform and its qualifications. Qualification summary. In addition, to ensure accurate presentations to clients, each member and candidate should prepare a summary of his or her own qualifications and experience and a list of the services the member or candidate is capable of performing.
Firms can assist member and candi- date compliance by periodically reviewing employee correspondence and documents that contain representations of individual or firm qualifications. Verify outside information. Members and candidates should encourage their employers to develop procedures for verifying information of third-party firms. Mital rated it liked it Oct 24, Piscan Mihai rated it it was amazing Jan 15, Charles Christensen rated it liked it Nov 24, Clare rated it liked it Feb 17, Muhammad Luqman rated it it was amazing Jul 07, Saint rated it it was amazing Jul 14, Nancy Hu rated it liked it Mar 12, Ayesha rated it liked it Aug 13, Linneasimpson rated it really liked it Sep 26, Kristian rated it liked it Dec 02, Benjamin rated it did not like it Jul 20, James Harling rated it really liked it Oct 14, Cagkan Onal rated it it was amazing Sep 13, Waithera rated it really liked it Nov 02, Ehsan rated it liked it Jan 04, Scott rated it liked it Mar 25, Scott Keller rated it it was amazing Apr 20, Amr Metwalli rated it liked it Oct 25, Andrius rated it it was ok Apr 04, Donna rated it it was amazing Jul 14, James rated it did not like it Oct 25, Liz Davis rated it it was amazing May 07, Andrei Radu rated it it was amazing Aug 24, There are no discussion topics on this book yet.
Be the first to start one ». Readers also enjoyed. It will almost certainly stir up controversy with ISR specialists. Disclosing limitations of the process will probably lead to broad boilerplate disclaimers as is already the case in most legal documents such as Mutual Fund prospectus.
These two directions followed by the SPC seem to some extent contradictory. More responsibility for supervisors requires clearer definitions and better enforceability not wider ranging aspirational objectives. In particular, I strongly believe it should clearly include all types of trail commissions, fee sharing schemes, soft dollar arrangements, etc. Denouncing such kickback arrangements is I think crucial if we wish to restore the image of our profession.
In other words do the standards cover communication materials or their understanding by clients and prospects. I think it is closest to thoroughness, zealous, hard working in English.
But its latin roots subsides in French and perhaps other latin languages for quick and efficient ; it is not considered a heavenly virtue. I believe the French version provides a qualitative appreciation of the result and English refers more to a character disposition and to the quantity of work produced than its relevance.
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Glenn Doggett, CFA says:. Mark Sinsheimer says:.
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