Mr. X, CFA is working with Company Z. Which are the laws that apply to him.
Company Z is based out of India
Has branch in the US from where Mr. X works
Mr. X engages in investment advisory services to Canada
CFAI Code and Standards
If the laws of Canada are the most strict does it apply??
Does sound lilke it means that way.
I though so too… but apparently the explaination states that the party to whom advisory services are provided is irrelevant.
Ah… That doesn’t sound like it makes much sense.
Anyone else have any suggestions?
This question is from where? I’d like to see all of the details.
For ethics you should go by the standards first and apply any logic later. If standard the doesn’t mention it as a requirement it doesn’t apply.
Just do as many practice question for ethics to get a hang of the standards and code.
This is a very poorly worded question. I would like to know as well that where did you get it from.
But the standards mention that the stricter of the laws/standard applies…
This is from elan mock exams. As i am restricted to reproduce the question exactly i am going to reframe it,
Mr. X, CFA works in company Zeta which is established in a country called A which has no securities laws and regulations. X frequently engages in investment advisory services in a neighbouring county called B, whose laws are more strict than the CFAI code and standards. When engaging in investment advisory services to country B, Mr.X should adhere to:
A. Laws of country B
B. Laws of country A
C. CFAI code and standards
Their answer was C? I am confused. Please explain.
Thank you
hmm…he should adhere to country B’s law cuz the question is asking which law to apply if he is engaging in advisory services to country B and country B’s laws are stricter?
I don’t understand either why C is correct…
Edit: I missed out a point in the question, it states “Applicable law states that the laws of the country where the member works, apply”
Even if we take this into consideration, I would still have chosen country b’s laws as they are the most strict among the 3. Or am i going wrong?
So, he works in country A whose laws are less strict than CFA code and standards. And he engages in advisory services in country B whose local laws are more strict than CFA code and standards.
But he does not work in country B, right?
So then I think we should follow what the question says: applicable law states the laws of the country where the member wokrs, apply.
In this case CFA code and standards should apply cuz they are more strict than country A’s laws.
Whatever he does in country B doesn’t matter in this case cuz he is not working there. (He simply engages in non-monetary advisory services there?)
I think the point here is what it means when the question says he engages in advisory services in country B…
Right then we would opt for CFAI code and standards.
But it is even possible to provide investment advisory services monetarily to another country without actually working there, (which I believe is the intent of the question also). Then do we compare all 3 laws or just stick to the 2 that you mentioned?
This question is straight forward. The answer is A. When he has anything to do with country B, he should comply with the most strict law
Ahhh…etchis is not my force…
I am confused why he shouldn’t stick to country B’s laws which are the most strict among all if he engages in investment advisory services there.
What it means ‘engaging in investment advisory services’ anyways? I mean, it is sth related to investment industry…it is not like he is giving interior design advices in country B, in which case, is unrelated to investment…
Let’s see if others can come up with some explainations…
Ok. I think his engagement in investment advisory service is not ‘work’. Maybe it is just voluntary activity. Therefore, in country B, according to the applical law, he should adhere to the law of country A, where he works. Since country A’s laws are less strict than CFA code and standards, he should comply with CFA code and standards!