Ethics Q-Gifts from Clients

[cchang]

I seem to be getting conflicting information on gifts from clients. Standard I-Independence and Objectivity does not mention getting written disclosure for gifts/compensation from clients, such as for achieving high returns over the year. Standard IVB-Additional Compensation Arrangements, states that members must make written disclosures to employers when accepting gifts from clients. I’ve seen answers in practices questions that state you need written disclosure for gifts from clients AND answers that say you do not need written disclosure for gifts from clients. Does anyone know why that is? Or could clarify? Thanks!

 

[sgupta0827]

One explanation could be whether the amount is significant to impair your objectivity. If it is merely a token amount like restaurant certificate, $100 certificate for shopping, or a very small gift etc, you don’t need to get the written permission. However, if the amount is significant, you do take written permission from the employer.

 

[anish]

cchang Wrote:
——————————————————-
> I seem to be getting conflicting information on
> gifts from clients. Standard I-Independence and
> Objectivity does not mention getting written
> disclosure for gifts/compensation from clients,
> such as for achieving high returns over the year.
> Standard IVB-Additional Compensation Arrangements,
> states that members must make written disclosures
> to employers when accepting gifts from clients.
> I’ve seen answers in practices questions that
> state you need written disclosure for gifts from
> clients AND answers that say you do not need
> written disclosure for gifts from clients. Does
> anyone know why that is? Or could clarify? Thanks!
I think we are talking about two different things here… Additional compensation is an arrangement where you get something on a regular basis.. everytime the return is above Risk free rate say or you are a board member for some compnay…. you need written permission for these things… If a client gives you a little gift (say tickets to a game) or so, you don’t need any prior written permission for it. It’s ok. You anyway cannot get it since you don’t know the client is going to give it to you.

 

[AndrewUNH]

anish is on the right track. You should also differentiate between gifts from CLIENTS and gifts from companies you are researching. Even with permission, you should not accept weekend getaways or valuable tickets or something from a subject company because that influences your decisions. Ditto for broker/dealers giving you gifts to entice you to trade with them.

 

[thisisbrianly]

Good thoughts here. Couple other things I’ve seen in the many Ethics ?s I’ve done:
- $100 is the limit for not requiring written consent. Anyone know, if its under $100, do you still need to disclose to employer?
- Need someone to second this: If it is a gift based on past performance, you only need to disclose to your employer….no written permission is necessary.
If it is an arrangement to receive “spiffs” for hitting a certain return in the future (say over 15%), thats where you need written permission from employer and client. I think this is because there is really no conflict for accepting something based on the past, but for the future spiff, the Port. Mgr. might be inclined to spend more time on the “spiffed” account and deal fairly with all accounts.

 

[mb45]

In the readings on ethics it mentions to look at the gift policy at your company. They set amounts for gifts and what not. It also mentions that if it is a gift from a client for returns in excess of what was the benchmark, that you could accept the gifts. One would have to report the acceptance of gifts to their employer so they could compare these returns to other clients and make sure you are not giving the gift giving clients preferential treatment.