Reading 3.4 Standard 4: Duties to Employers Flashcards
Describe the Duties to Employers standard as it applies to Loyalty.
In matters related to employment, members and candidates must act for the benefit of their employer and not deprive their employer of the advantage of their skills and abilities, divulge confidential information, or otherwise cause harm to their employer.
What should be included in termination policies?
Clear procedures regarding the resignation process, including addressing how the termination will be disclosed to clients and staff and whether updates posted through social media platforms will be allowed.
An outline of the procedures for transferring ongoing research and account management responsibilities.
Address agreements that allow departing employees to remove specific client-related information upon resignation.
Describe the Duties to Employers standard as it applies to Additional Compensation Arrangements.
Members and candidates must not accept gifts, benefits, compensation, or consideration that competes with or might reasonably be expected to create a conflict of interest with their employer’s interest unless they obtain written consent from all parties involved.
Describe the purpose of a competition policy.
A member or candidate must understand restrictions placed by the employer on offering similar services outside the firm while employed by the firm.
If an employer elects to have its employees sign a non-compete agreement as part of the employment agreement, the member or candidate should ensure that the details are clear and fully explained prior to signing the agreement.
Describe the compliance procedures for additional compensation arrangements.
Should make an immediate written report to their supervisor and compliance officer specifying any compensation they propose to receive for services in addition to the compensation or benefits received from their employer.
The details should be confirmed by the party offering the additional compensation.
This written report should state the terms of any agreement under which a member or candidate will receive additional compensation.
Describe what a supervisor should do once a violation is discovered.
Respond promptly.
Conduct a thorough investigation of the activities to determine the scope of the wrongdoing.
Increase supervision or place appropriate limitations on the wrongdoer pending the outcome of the investigation.
Review procedures for potential changes necessary to prevent future violations from occurring.
Adequate supervisory compliance procedures should include which elements?
Be clearly written, easy to understand, and accessible.
Designate a compliance officer with defined authority and responsibility and with the resources and authority to implement procedures.
Describe the hierarchy of supervision and assign duties among supervisors.
Implement a system of checks and balances.
Outline the scope of the procedures.
Outline procedures to document the monitoring and testing of compliance procedures.
Outline permissible conduct.
Delineate procedures for reporting violations and sanctions.
List the Guidance of the Duties to Employers standard as it applies to Responsibilities of Supervisors.
Promote compliance with applicable laws, rules, regulations, and firm policies and the Code and Standards.
Instruct on methods to promote compliance.
Make reasonable efforts to prevent and detect violations by ensuring the establishment of effective compliance systems.
Implement education and training programs on a recurring or regular basis for employees under their supervision.
Bring inadequate compliance systems to the attention of the firm’s senior managers and recommend corrective action.
Describe the Guidance of the Duties to Employers standard as it applies to Loyalty.
Protect the interests of the firm by refraining from any conduct that would injure the firm, deprive it of profit, or deprive it of the member’s or candidate’s skills and ability.
Place the interests of clients above the interests of their employer but also consider the effects of their conduct on the sustainability and integrity of the employer firm.
Comply with the policies and procedures established by the employers that govern the employer–employee relationship.
When leaving an employer, what activities might constitute a violation that conflicts with the duties until resignation becomes effective?
Misappropriation of trade secrets
Misuse of confidential information
Solicitation of the employer’s clients prior to cessation of employment
Self-dealing
Misappropriation of clients or client lists
