Standard VI Conflicts of interest

Question 1

What are the 3 sub-standards in ‘conflicts of interest’

Answer 1

VI(A): Disclosure of conflicts
VI(B): Priority of transactions
VI(C): Referral fees

Question 2

What does standard VI(A) require?

Answer 2

Disclosure of conflicts:

• Full and fair disclosure of all of matters that could impact objectivity and independence
• To clients, prospective clients and their employer

Question 3

In what situations may a conflict of interest arise?

Answer 3

Ownership of stocks analysed
Participation on outside boards
Financial or other pressures

Question 4

What does standard VI(B) require?

Answer 4

Priority of transactions: Investment transactions for clients and employers should take priority over investment transactions where the member is a beneficial owner

Question 5

What are the three guidelines for avoiding potential conflicts of interest in relation to transactions?

Answer 5

1) Client must not be disadvantaged by the trade
2) The investment professional does not benefit personally from trades undertaken for clients
3) Investment professional complies with applicable regulatory requirements

Question 6

What does standard VI(C) require?

Answer 6

Referral fees
- Disclose to employer and clients any compensation, consideration or benefit received from or paid to others for the recommendation of services or products