know

strict

identify

cultural and religious laws

use of social media

Gift

Relationships

not promised, unless guaranteed

omissions

performance reporting

Plagiarism

3rd party information

typographic error

learn from media

lying, cheating, stealing

negatively affects ability to perform professional activities

personal bankruptcy

intoxicated after lunch

environmental activist

MNI?

Mosaic theory

using industry experts

info-based

transaction-based

not void

identify client

soft dollar

proxy voting policies

undertanding

fairly <> equally

trade

analyst's recommendation

process: know clients -> write IPS -> follow IPS

update IPS at least annually and prior to material changes

diversification

manage to index or mandate

address unsolicited trade requests

covered call options in equity portfolio -> not voilate, hedge risk

not misrepresent past performance

include terminated portfolio

weighted rate of return

make detailed information available

apply GIPS standards

full disclosure

modify performance attribution methodology without proper notification ->voilate

keep confidential

if law requires confidentiality, even if illegal, shall not disclose

continue to maintain confidentiality even after relationship ended

social media

on duty

leaving an employer

use of social media

part time shall also follow

whistleblowing -> violate

disclose and get written consent

prevent

find violation

can delegate, but not relieve supervisory responsibility

shall establish procedures to prevent unauthorized dissemination through social media networks

use secondary or third-party research

use quantitatively oriented research

develop quantitatively oriented techniques

group research

always recommend "hot" means no reasonable basis

selection of external adviser or subadviser shall be based on complete review

not guarantee no down-side risk

disclose format and principles of investment processes

promptly disclose material changes

distinguish between fact and opinion

identify risk and limitation of analysis

disclose material error

shall educate clients

records in hard copy or electronic form

records are property of the firm

full and fair disclosure

can put conflict of interest into restricted list

Example

not require to disclose personal/retirement investments in large diversified mutual funds

client -> employer -> individual

allow enough time for clients to respond

inform employer, clients of benefits for referrals

pass level III but not receive charter cannot use CFA designation

only firm managing assets can claim

firm-wide and full compliance

voluntary

follow local law but disclose the conflict

independent 3rd party to perform verification

verification cannot be based on single composite

verification does not ensure accuracy

portfolios of similar investment strategies, objectives or mandates

actual, fee-payment, discretionary portfolios must be included in at least one composite

non-fee-paying discretionary portfolio may be included

non-discretionary portfolios must not be included

total firm asset must fair aggregate value

the firm

discretion