Standard 4 Duties to Employers Flashcards
Describe the three subjects of the fourth standard.
Loyalty
Additional compensation arrangements
Responsibilities as Supervisors
Describe the first subject of the fourth standard.
In matters related to their employment, members 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.
Standard 4A requires members to protect the interests of their firm by refraining from any conduct that would injure the firm, deprive it of profit, or deprive it of the member’s skills and ability. However, members must always place the interests of clients above the interests of their employer! (but should also consider the effects of their conduct on the sustainability and integrity of the employer firm)
Members should not blindly place employer interests ahead of personal interests in all matters, better, they should enter into a dialogue with their employer about balancing personal and employment obligations.
Members should abstain from independent competitive activity that could conflict with the interests of their employer.
When members are planning to leave their current employer, they must continue to act in the employer’s best interest. They must not engage in any activities that would conflict with this duty until their resignation becomes effective.
A member’s personal interest, as well as the interests of his employer, are secondary to protecting the integrity of capital markets and the interests of clients. Therefore, circumstances may arise in which members must act contrary to their employer’s interests in order to comply with their duties to the market and clients.
What are recommended procedures to maintain loyalty in standard four?
Competition policy.
Termination policy.
Incident-reporting procedures.
Employee classification.
Describe the second subject of the fourth standard.
Additional Compensation Arrangements - Members must not accept gifts, benefits, compensation, or consideration that competes with or might reasonable be expected to create a conflict of interest with their employer’s interest unless they obtain written consent from all parties.
Members must obtain permission for additional compensation/benefits because such arrangements may affect loyalties and objectivity and create potential conflicts of interest.
What is the third subject of the fourth standard?
Responsibilities of Supervisors - Members must make reasonable efforts to ensure that anyone subject to their supervision or authority complies with applicable laws, rules, regulations and the Code and Standards.
If a firm has no supervisory policies in place, a member should decline a supervisory role until the policies are in place.
