D. Standard IV: Relationships with and Responsibilities to Clients and Prospects - Part II

6. IV(B.3) Fair Treatment of clients

Required conduct
Deal fairly with clients regarding:
(1) Dissemination of recommendations
(2) Dissemination of changes of prior opinions
(3) Taking investment action.

Every effort should me made to communicate investment ideas to clients, for which the ideas are suitable and who have a known interest in them, as simultaneously as possible within reasonable limits defined by communications technology.


7. IV(b.4)Priority of Transactions
Required conduct
This standard applies to all members and access persons (defined as persons who have advanced knowledge pertaining to upcoming research recommendations, changes in opinions about securities, and/or pending investment actions to be taken either by the firm itself, or on behalf of clients).

There is nothing unethical about access persons investing for their own benefit. The personal investments of access persons and investment professionals must be undertaken within the confines of the following restrictions.
(1) Interests of clients, the employer, and the integrity of the professional must be put ahead of the access person’s or member’s own personal interests.
(2) Care must be taken that personal investments do not create conflicts of interest or impair the investment professional’s ability to be objective and render independent professional judgments about securities.
(3) All applicable laws, regulations, and compliance procedures must be followed.
(4) The investment professional should not receive a personal benefit from investment actions taken on behalf of a client (except for the usual and customary compensation for the service rendered).
Compliance Procedures

8. IV(B.5) Confidentiality
Required conduct
Preserve the confidentiality of client and employer information, unless it concerns illegal activities. The best approach is never to disclose information received from a client or employer, except to authorized persons on a “need to know” basis.


9. IV(B.6) Prohibition against misrepresentations
Required conduct
A member may not misrepresent:
(1) The performance of his or her (or the employer’s) services or investment performance.
(2) Their qualifications or the qualifications of their firm.
(3) Their academic and professional standards.

Members should ensure that misrepresentation does not occur in oral presentations, advertising, electronic communication, or written materials.

No guarantees should be given regarding the outcome or the probable return on an investment.


10. IV (B.7) Disclose conflicts of interest to clients and prospects
Required conduct
Members must disclose to clients and prospects any potential conflict of interest. Disclosure of any matter that could reasonably be expected to impair objectivity allows clients to judge motives and possible biases for themselves.



11. IV(B.8) Disclose referral fees
Required conduct
The existence of referral fees, their nature, and their amount should be disclosed in writing to any prospective client, as soon as the client is referred to a member.

Compliance Procedures