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Basic Question 9 of 9
A manager enters into a soft dollar agreement with a brokerage firm to provide both brokerage and research services to aid in the investment process. Which of the following are not required for compliance with CFA Institute's soft dollar standards?
II. determination of whether the research provided meets Standard III(A) Loyalty, Prudence, and Care
III. obtaining the best execution on behalf of clients
I. disclosure of soft dollar arrangements to clients
II. determination of whether the research provided meets Standard III(A) Loyalty, Prudence, and Care
III. obtaining the best execution on behalf of clients
User Contributed Comments 11
| User | Comment |
|---|---|
| shasha | I don't believe any one of the three answers is not requried by CFA Institute. The note ("The Standard" part, under 4.2) clearly says research provided must meet Standard III(A). Do I get misunderstanding? |
| LogicMan | I believe II is not required. The brokerage firm should not try to determine at all. |
| cbb1 | The manager does not have to determine that the brokerage firm is independent and objective under III A. |
| kulla | I guess the manager has to determine the quality of research reports as pointed out by shasha |
| tengo | The client should receive a benefit from the research purchased by brokerage over a reasonable period of time. If the research was faulty the client would not receive a benefit. |
| StanleyMo | soft dollar standards does not mention on determining whether research provided meets Standard III(A). |
| prajacti | USE of the research should meet std III A |
| Gooner7 | "Investment mgr is responsible for determining if research is CFA-Institute standard" it specifically states in the reading. Call me crazy, but to be "CFA-institute standard," it would have to meet any of the standards? No? |
| gill15 | seems kind of weird doesn't? doesnt mention determing whether meets the standards but the use should meet it? How do you use the research without determining if it meets the standard? |
| johntan1979 | This question is referring to CFA Institute's Soft Dollar Standards: http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2004.n1.4005 Not once was Standard III(A) mentioned in the entire document. |
| raffrobb | Great comments and discussion, after reviewing and reading question carefully, II is crystal clear best answer |
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Learning Outcome Statements
demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity
recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct
identify conduct that conforms to the Code and Standards and conduct that violates the Code and Standards
CFA® 2024 Level I Curriculum, Volume 6, Module 3.