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Standard VI (B) - Priority of Transactions

This standard states that for a member the investment transactions for his clients and employers should take priority over his personal investment transactions.

Examples of Violation

  • Example 1: An analyst has come across a shining stock. Before making a purchase recommendation for the stock to his clients, he purchases the stock in his personal account. This is a violation of the standard.
  • Example 2: A portfolio manager, who manages funds for several of his clients and also his own parents, first allocates any new IPOs to other clients, and any remaining shares to his parents account. He actually does so to avoid any blame for favouring his parents. However, he is violating the standard because his parents are also paying clients like others to his firm.
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Standard VI (A) - Disclosure of Conflicts

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Standard VI (C) - Referral Fees

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01
Seven Standards of Professional Conduct
02
Standard I (A) Professionalism - Knowledge of the Law
03
Standard I (B) Professionalism - Independence and Objectivity
04
Standard I (C) Professionalism - Misrepresentation
05
Standard I (D) Professionalism - Misconduct
06
Standard II (A) - Material Non-public Information
07
Standard II (B) - Market Manipulation
08
Standard III (A) - Loyalty, Prudence, and Care
09
Standard III (B) - Fair Dealing
10
Standard III (C) - Suitability
11
Standard III (D) - Performance Presentation
12
Standard III (E) - Preservation of Confidentiality
13
Standard IV (A) - Loyalty
14
Standard IV (B) - Additional Compensation Arrangements
15
Standard IV (C) - Responsibilities of Supervisors
16
Standard V (A) - Diligence and Reasonable Basis
17
Standard V (B) - Communication with Clients and Prospective Clients
18
Standard V (C) - Record Retention
19
Standard VI (A) - Disclosure of Conflicts
20
Standard VI (B) - Priority of Transactions
21
Standard VI (C) - Referral Fees
22
Guidance for Standard VII – Responsibilities of a CFA Institute Member or CFA Candidate

Topics

Investment Management

Course Downloads

Resources

Guidance for Standards I – VII

Study Notes for CFA Level I - Guidance for Standards I – VII

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