medium · CFA Level I ethics
Westfork Bancorp requires James to use Westfork’s internal brokerage desk for all retirement fund trades. James finds that the internal desk’s execution costs are consistently 0.05 per share higher than external brokers. Standard III(A) requires James to: Follow Westfork's policy because his duty of loyalty to his employer overrides the cost difference. Seek 'best execution' for the clients and inform his employer that using the internal desk violates his duty of loyalty and prudence to the fund participants. Continue using the internal desk but disclose the higher costs in the annual performance report.
- Seek 'best execution' for the clients and inform his employer that using the internal desk violates his duty of loyalty and prudence to the fund participants.
- Follow Westfork's policy because his duty of loyalty to his employer overrides the cost difference.
- Continue using the internal desk but disclose the higher costs in the annual performance report.
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