{"id":40985,"date":"2025-02-12T05:11:33","date_gmt":"2025-02-12T05:11:33","guid":{"rendered":"https:\/\/analystprep.com\/study-notes\/?p=40985"},"modified":"2025-02-14T05:54:30","modified_gmt":"2025-02-14T05:54:30","slug":"standard-vib-priority-of-transactions","status":"publish","type":"post","link":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/","title":{"rendered":"Standard VI(B) &#8211; Priority of transactions"},"content":{"rendered":"<p><iframe loading=\"lazy\" src=\"\/\/www.youtube.com\/embed\/Isu6Z-VeSMo\" width=\"611\" height=\"343\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Client and employer investment transactions must take precedence over investment transactions in which a member or candidate is the beneficial owner.<\/p>\n<blockquote>\n<h4><strong>Application 1: Family Account as Equals<\/strong><\/h4>\n<p>Gia Davies, a senior trader at InvestCorp Brokerage, has recently helped her sister open up a standard fee-paying brokerage account with InvestCorp&#8217;s Brokerage Divison. One of InvestCorp&#8217;s investment banking clients, InfoTrak Inc., is set to go public in the next few weeks through an initial public offering.<\/p>\n<p>Which of Davies&#8217;s actions would&nbsp;<em>most likely<\/em>&nbsp;violate Standard VI (B) \u2013 Priority of Transactions?<\/p>\n<ol style=\"list-style-type: upper-alpha;\">\n<li>Taking no action and allowing her sister&#8217;s account to be treated like any other standard fee-paying account.<\/li>\n<li>Increasing the allocation of InfoTrak&#8217;s shares in her sister&#8217;s brokerage account.<\/li>\n<li>Failing to disclose the family relationship to the compliance team.<\/li>\n<\/ol>\n<p><strong>Solution<\/strong><\/p>\n<p>The correct answer is <strong>B<\/strong>.<\/p>\n<p>Davies increasing her sister&#8217;s allocation in InfoTrak&#8217;s shares would violate Standard VI (B) \u2013 Priority of Transactions. Her sister is a fee-paying client and should be treated like any other client \u2013 she should not receive favorable treatment. Her allocation should be treated in the same manner as any other fee-paying client.<\/p>\n<h4><strong>Application 2: Personal Trading and Disclosure<\/strong><\/h4>\n<p>Benjamin Cook was a research intern at a prominent active management firm. He purchases a luxury car and several designer accessories during his eight-month-long internship. Regina Perry, chief compliance officer at the firm, is responsible for monitoring personal stock trades for all employees. She investigates Cook&#8217;s personal trades and finds that Cook had made significant profits by selling (shorting) stocks just before they were put on the firm&#8217;s &#8220;SELL&#8221; list.<\/p>\n<p>Cook had omitted several personal transactions on his monthly personal trading form. In addition, he failed to submit his trading forms over the last two months of his internship.<\/p>\n<p>Have Cook and (or) Perry violated Standard VI(B) \u2013 Priority of Transactions?<\/p>\n<ol style=\"list-style-type: upper-alpha;\">\n<li>Neither Cook nor Perry has violated Standard VI(B) \u2013 Priority of Transactions.<\/li>\n<li>Cook violated Standard VI(B) \u2013 Priority of Transactions.<\/li>\n<li>Both Cook and Perry have violated Standard VI(B) \u2013 Priority of Transactions.<\/li>\n<\/ol>\n<p><strong>Solution<\/strong><\/p>\n<p>The correct answer is <strong>B<\/strong>.<\/p>\n<p>Cook violated Standard VI(B) \u2013 Priority of Transactions by placing his trades before his client&#8217;s trades.<\/p>\n<p>Additionally, Perry, the chief compliance officer, has violated Standard IV(C) \u2013 Responsibility of Supervisors by allowing Cook to continue his duties without accurate and infrequent submission of his personal transaction form. Note that if Cook had passed on the firm&#8217;s recommendations to an individual who traded the security, the use of the information would be a violation of Standard II(A) \u2013 Material Nonpublic Information.<\/p>\n<\/blockquote>\n<p>LOS 6(a): Evaluate practices, policies, and conduct relative to the CFA Institute Code of Ethics and Standards of Professional Conduct.<\/p>\n<p>LOS 6(b): Explain how the practices, policies, or conduct does or does not violate the CFA Institute Code of Ethics and Standards of Professional Conduct. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Client and employer investment transactions must take precedence over investment transactions in which a member or candidate is the beneficial owner. Application 1: Family Account as Equals Gia Davies, a senior trader at InvestCorp Brokerage, has recently helped her sister&#8230;<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[571],"tags":[],"class_list":["post-40985","post","type-post","status-publish","format-standard","hentry","category-cfa-level-iii","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Standard VI(B) - Priority of transactions - CFA, FRM, and Actuarial Exams Study Notes<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Standard VI(B) - Priority of transactions - CFA, FRM, and Actuarial Exams Study Notes\" \/>\n<meta property=\"og:description\" content=\"Client and employer investment transactions must take precedence over investment transactions in which a member or candidate is the beneficial owner. Application 1: Family Account as Equals Gia Davies, a senior trader at InvestCorp Brokerage, has recently helped her sister...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/\" \/>\n<meta property=\"og:site_name\" content=\"CFA, FRM, and Actuarial Exams Study Notes\" \/>\n<meta property=\"article:published_time\" content=\"2025-02-12T05:11:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-14T05:54:30+00:00\" \/>\n<meta name=\"author\" content=\"Eric A\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Eric A\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/\"},\"author\":{\"name\":\"Eric A\",\"@id\":\"https:\/\/analystprep.com\/study-notes\/#\/schema\/person\/41f2edd4aa576d241f81c7be5f7ab2ff\"},\"headline\":\"Standard VI(B) &#8211; Priority of transactions\",\"datePublished\":\"2025-02-12T05:11:33+00:00\",\"dateModified\":\"2025-02-14T05:54:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/\"},\"wordCount\":481,\"articleSection\":[\"Level III of the CFA\u00ae Program\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/\",\"url\":\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/\",\"name\":\"Standard VI(B) - Priority of transactions - CFA, FRM, and Actuarial Exams Study Notes\",\"isPartOf\":{\"@id\":\"https:\/\/analystprep.com\/study-notes\/#website\"},\"datePublished\":\"2025-02-12T05:11:33+00:00\",\"dateModified\":\"2025-02-14T05:54:30+00:00\",\"author\":{\"@id\":\"https:\/\/analystprep.com\/study-notes\/#\/schema\/person\/41f2edd4aa576d241f81c7be5f7ab2ff\"},\"breadcrumb\":{\"@id\":\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/analystprep.com\/study-notes\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Standard VI(B) &#8211; Priority of transactions\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/analystprep.com\/study-notes\/#website\",\"url\":\"https:\/\/analystprep.com\/study-notes\/\",\"name\":\"CFA, FRM, and Actuarial Exams Study Notes\",\"description\":\"Question Bank and Study Notes for the CFA, FRM, and Actuarial exams\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/analystprep.com\/study-notes\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/analystprep.com\/study-notes\/#\/schema\/person\/41f2edd4aa576d241f81c7be5f7ab2ff\",\"name\":\"Eric A\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/analystprep.com\/study-notes\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/cdf79efae139881cd16f8a241a402219e860b1657cb0771f2df4ddd3f6d1c921?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/cdf79efae139881cd16f8a241a402219e860b1657cb0771f2df4ddd3f6d1c921?s=96&d=mm&r=g\",\"caption\":\"Eric A\"},\"url\":\"https:\/\/analystprep.com\/study-notes\/author\/eric-a\/\"}]}<\/script>\n<meta property=\"og:video\" content=\"https:\/\/www.youtube.com\/embed\/Isu6Z-VeSMo\" \/>\n<meta property=\"og:video:type\" content=\"text\/html\" \/>\n<meta property=\"og:video:duration\" content=\"1576\" \/>\n<meta property=\"og:video:width\" content=\"480\" \/>\n<meta property=\"og:video:height\" content=\"270\" \/>\n<meta property=\"ya:ovs:adult\" content=\"false\" \/>\n<meta property=\"ya:ovs:upload_date\" content=\"2025-02-12T05:11:33+00:00\" \/>\n<meta property=\"ya:ovs:allow_embed\" content=\"true\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Standard VI(B) - Priority of transactions - CFA, FRM, and Actuarial Exams Study Notes","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/","og_locale":"en_US","og_type":"article","og_title":"Standard VI(B) - Priority of transactions - CFA, FRM, and Actuarial Exams Study Notes","og_description":"Client and employer investment transactions must take precedence over investment transactions in which a member or candidate is the beneficial owner. Application 1: Family Account as Equals Gia Davies, a senior trader at InvestCorp Brokerage, has recently helped her sister...","og_url":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/","og_site_name":"CFA, FRM, and Actuarial Exams Study Notes","article_published_time":"2025-02-12T05:11:33+00:00","article_modified_time":"2025-02-14T05:54:30+00:00","author":"Eric A","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Eric A","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/#article","isPartOf":{"@id":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/"},"author":{"name":"Eric A","@id":"https:\/\/analystprep.com\/study-notes\/#\/schema\/person\/41f2edd4aa576d241f81c7be5f7ab2ff"},"headline":"Standard VI(B) &#8211; Priority of transactions","datePublished":"2025-02-12T05:11:33+00:00","dateModified":"2025-02-14T05:54:30+00:00","mainEntityOfPage":{"@id":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/"},"wordCount":481,"articleSection":["Level III of the CFA\u00ae Program"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/","url":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/","name":"Standard VI(B) - Priority of transactions - CFA, FRM, and Actuarial Exams Study Notes","isPartOf":{"@id":"https:\/\/analystprep.com\/study-notes\/#website"},"datePublished":"2025-02-12T05:11:33+00:00","dateModified":"2025-02-14T05:54:30+00:00","author":{"@id":"https:\/\/analystprep.com\/study-notes\/#\/schema\/person\/41f2edd4aa576d241f81c7be5f7ab2ff"},"breadcrumb":{"@id":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/analystprep.com\/study-notes\/cfa-level-iii\/standard-vib-priority-of-transactions\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/analystprep.com\/study-notes\/"},{"@type":"ListItem","position":2,"name":"Standard VI(B) &#8211; Priority of transactions"}]},{"@type":"WebSite","@id":"https:\/\/analystprep.com\/study-notes\/#website","url":"https:\/\/analystprep.com\/study-notes\/","name":"CFA, FRM, and Actuarial Exams Study Notes","description":"Question Bank and Study Notes for the CFA, FRM, and Actuarial exams","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/analystprep.com\/study-notes\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/analystprep.com\/study-notes\/#\/schema\/person\/41f2edd4aa576d241f81c7be5f7ab2ff","name":"Eric A","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/analystprep.com\/study-notes\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/cdf79efae139881cd16f8a241a402219e860b1657cb0771f2df4ddd3f6d1c921?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/cdf79efae139881cd16f8a241a402219e860b1657cb0771f2df4ddd3f6d1c921?s=96&d=mm&r=g","caption":"Eric A"},"url":"https:\/\/analystprep.com\/study-notes\/author\/eric-a\/"}]},"og_video":"https:\/\/www.youtube.com\/embed\/Isu6Z-VeSMo","og_video_type":"text\/html","og_video_duration":"1576","og_video_width":"480","og_video_height":"270","ya_ovs_adult":"false","ya_ovs_upload_date":"2025-02-12T05:11:33+00:00","ya_ovs_allow_embed":"true"},"_links":{"self":[{"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/posts\/40985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/comments?post=40985"}],"version-history":[{"count":3,"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/posts\/40985\/revisions"}],"predecessor-version":[{"id":41085,"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/posts\/40985\/revisions\/41085"}],"wp:attachment":[{"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/media?parent=40985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/categories?post=40985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/analystprep.com\/study-notes\/wp-json\/wp\/v2\/tags?post=40985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}