Ethics - Soft Dollar Standards
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I am not sure either.. This is what i understand..
Proprietary Research Arrangement:
It is basically an arrangement whereby the invesment manager directs the broker to EXECUTE CLIENT TRANSACTIONS IN EXCHANGE FOR WHICH THE INVESTMENT MANAGER RECEIVES RESEARCH FROM THE BROKER AND/OR FROM THE “in-house” staff of the brokerage firm.
Thus, i suppose, that there is a brokerage arrangement between the investment manager and the broker (who executes the client’s transactions), whereby, such research received by investment manager should be used for the benefit of the client.
Soft Dollar arrangements:
It is all about the clients money ( which i suppose is the brokerage paid from client to broker, through investment manager) which is used for his personal benefit by the investment manager. And as per CFA standards, anyone who complies with the CFA Soft dollar standards is bound by the fact that he cannot use the money for his personal benefit.
Thus propreitory arrangement is the deal between the investment manager and the broker and it is a sub-division of SOFT DOLLAR ARRANGEMENTS..
P.S. This is what i understand from what I read.. Sorry if I am 100% wrong and please correct me…
Thanks..
Proprietary Research Arrangement:
It is basically an arrangement whereby the invesment manager directs the broker to EXECUTE CLIENT TRANSACTIONS IN EXCHANGE FOR WHICH THE INVESTMENT MANAGER RECEIVES RESEARCH FROM THE BROKER AND/OR FROM THE “in-house” staff of the brokerage firm.
Thus, i suppose, that there is a brokerage arrangement between the investment manager and the broker (who executes the client’s transactions), whereby, such research received by investment manager should be used for the benefit of the client.
Soft Dollar arrangements:
It is all about the clients money ( which i suppose is the brokerage paid from client to broker, through investment manager) which is used for his personal benefit by the investment manager. And as per CFA standards, anyone who complies with the CFA Soft dollar standards is bound by the fact that he cannot use the money for his personal benefit.
Thus propreitory arrangement is the deal between the investment manager and the broker and it is a sub-division of SOFT DOLLAR ARRANGEMENTS..
P.S. This is what i understand from what I read.. Sorry if I am 100% wrong and please correct me…
Thanks..
Not exactly…
I normally use schweser for my preparation. But for Soft dollars part, schweser has vague information. So I used CFAI notes… But i just glanced through Appendix C and m not very sure of what it means.. Ethics is the part which I dont concentrate much on. But seeing ur queries, I feel that I need to concentrate on ethics too..
BTW, is there anything u find important in Appendix C?? If yes, please lemme knw. Even I may want to read the important part.
I normally use schweser for my preparation. But for Soft dollars part, schweser has vague information. So I used CFAI notes… But i just glanced through Appendix C and m not very sure of what it means.. Ethics is the part which I dont concentrate much on. But seeing ur queries, I feel that I need to concentrate on ethics too..
BTW, is there anything u find important in Appendix C?? If yes, please lemme knw. Even I may want to read the important part.
Am not sure if you are focussing much on ethics or is it me who is focussing very less..
And for your query, I guess you read it wrong. XYZ is basically a firm and it complies with the CFAI soft dollar standards. i.e. it is voluntary for a firm to comply with CFAI soft dollar standards and if it complies then any violation can lead to problems . And you are very right that a firm cannot be a CFAI member. So a read error from your side I suppose.
I hope u get it.
And for your query, I guess you read it wrong. XYZ is basically a firm and it complies with the CFAI soft dollar standards. i.e. it is voluntary for a firm to comply with CFAI soft dollar standards and if it complies then any violation can lead to problems . And you are very right that a firm cannot be a CFAI member. So a read error from your side I suppose.
I hope u get it.
Yeah, but read the first line. It says that XYZ complies with the soft dollar standards. So just to make it simple, I guess, the second sentence says XYZ, a CFAI member. Correct me if I am wrong!
I am doing nothing as of now.. Am back from a trip, so its gonna take some time to get back to d books..
How much are u done with? Reading FRA for the first time?