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2013, Study Session # 2, Reading # 6

ASSET MANAGER CODE OF PROFESSIONAL CONDUCT

THE ASSET MANAGER CODE

There are six risk components to the asset manager code.

Ethical responsibilities related to six components are:

Always act ethically & professionally.

Act independently & objectively.

Perform actions using skill, diligence & competence.

Act in best interest of the client.

Communicate with clients on a regular & accurate manner.

Legal & regulatory compliance.

PREVENTING VIOLATIONS

Loyalty to Clients Investment Process & Actions

Put the clients interest before your own.

Maintain confidentiality.

Not accept any gift that affects your judgment & objectivity.

Design salary arrangements that align the interests of the
client with those of manager.
Take actions that would not cause any harm to the client.

Never engage in market manipulation of security prices.

Fair dealing with all clients.

Thoroughly investigate & research different investment
options.

Trading Risk Management, Compliance & Support

Dont trade or cause others to trade on insider information.

Seek best execution for all trades & equitable allocation
among clients.

Use soft $ commission to provide products & services that
aids the portfolio manager in investment decision making
process.

Place clients trades before your own.

Develop policies & procedures for complying with codes &
standards & regulatory requirements.

Appoint a compliance officer & establish a firm wide system
for identifying & measuring managers risk position.

Complete & accurate portfolio information disseminated to
clients.

Maintain records.

Contingency plan in the event of a natural disaster.

Performance & Valuation Disclosure

Report investment results in an accurate manner without
misrepresentation & using fair MV.

Guideline follows GIPS.

In order to avoid conflict of interest, transfer the
responsibility of valuing asset accounts to an independent
third party.

Disclose the following to the client:

Any information needed to make an informed decision
regarding the investment manager or the organization.

Potential conflict of interest.

Any regulatory or disciplinary action taken against the
manager or its personnel.

The investment decision-making process & fee
schedule.

Discussion about soft $ commission.

Trade allocation procedures & firm-wide risk
management processes.

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