[Set 2] Module 5 - Code of Conduct and Ethics Flashcards
(18 cards)
In a fully discretionary fund management mandate, EARNING INCOME for the fund is the priority
False
Marketing materials SHOULD NOT have misleading statements / disclosures.
True
The TOAP Code of Conduct may be amended by a majority vote of the BOARD OF DIRECTORS.
False
What is the term for investment trades that are executed in a timely manner and on the best available terms that are favorable to the client?
a. Best execution
b. Prompt trade
c. Best rate
a. Best execution
You recently found out that the marketing materials of your competitor Trust Entity published CBXY’s UITF as performing poorly. You noticed that CBXY is your bank’s acronym. What should you do?
a. File formal complaint with TOAP
b. File a case in court
c. Complain in Social Media
d. Do Nothing
a. File formal complaint with TOAP
A trust officer may be expelled from TOAP.
True
Which of the following protects the interest of investors?
a. Chinese Wall
b. Best Execution
c. Personal Investment Policy
d. All of the Above
e. None of the Above.
d. All of the Above
The trustee represents the client’s best interest at all times. In the discharge of its responsibilities, it should deliver the highest standards of:
a. Integrity & Prudent Expertise
b. Serving the best interest of the society
c. Confidentiality
d. Personal Investment Policy
E. Best Execution
a. Integrity & Prudent Expertise
TRUST OFFICER means any officer or non-officer of the trust department who exercises discretion and judgment. This shall likewise apply to any Trust Officer acting as Fund Manager who is engaged in all forms of administration of property, or money and its equivalent, for the benefit of the owner or a third person.
True
A trust relationship is the SAME as a banking relationship.
False
Fees MUST be commensurate to services rendered & based on: time spent, extent of business relationship, personnel required, degree of difficulty and performance, responsibilities / risks, nature of the fund / assets.
True
A trust officer is REQUIRED to provide fund performance and investment activities of the client’s portfolio.
True
CHINESE WALL is used to describe situations where there is a need to maintain confidentiality in order to prevent conflicts of interest. Financial institutions have used Chinese wall policies as a means to self-regulate their business dealings by creating ethical boundaries between departments, e.g. block the exchange of information between departments if it might result in business activities that are ethically or legally questionable.
True
____________ requires that fiduciaries manage the assets entrusted to them with the same care and discretion as well as diligence as a person of prudence, good character, and intelligence would handle his/her own affairs.
A. Self-Dealing
B. Arm’s length transaction
C. Prudent Man’s rule
D. Reasonable
C. Prudent Man’s rule
A Trustee should always act with the best interest of the client in mind showing utmost care and diligence on the asset being managed.
A. Best Execution
B. Prudent Administration
C. Chinese wall policy
D. Arm’s length transaction
B. Prudent Administration
Fidelity is the cardinal principle common all fiduciary relationships. Which of the following policies are predicated upon fidelity is/are included?
I. Prudent Administration
II. Undivided loyalty and utmost care
III. Non-delegation of responsibilities
IV. Preserving and protecting property
V. Keeping and rendering accounts
A. I, III, V, ONLY
B. II and IV ONLY
C. ALL ARE NOT INCLUDED
D. ALL ARE INCLUDED
D. ALL ARE INCLUDED
When given full discretion, a trustee must do all of the following, except:
A. Safety of principal is primary, income only secondary
B. Clear understanding of client guidelines, objectives, restrictions
C. Require client’s approval for high risk transactions
D. Comply with all terms and conditions
E. Conduct business at arm’s length basis
C. Require client’s approval for high risk transactions
What is the term for keeping information about past, current and prospective clients confidential, unless disclosure is authorized in writing by the client or required by law?
A. Confidentiality and Materiality of Information
B. Chinese Wall
C. Data Retention Policy
A. Confidentiality and Materiality of Information
