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Answer: Yes
**Explanation:** Standard III (B), Fair Dealing, requires that members and candidates distribute new offerings or secondary financings to all clients for whom the investments are appropriate, in line with the firm's allocation policies. If the issue is oversubscribed, members should prioritize clients over themselves or their immediate family members to free up additional shares for clients. However, if family-member accounts are managed similarly to other clients and the investment is suitable, they should not be excluded from the allocation. In this case, Lee's brother has a standard fee-paying account, and the IPO is suitable for him. Therefore, Lee's inclusion of his brother in the pro-rata allocation of the IPO shares is consistent with the Standards. - **Option B** is incorrect because Lee's inclusion of his brother in the allocation aligns with Standard III (B). - **Option C** is incorrect because Lee only subscribes to the IPO for clients for whom it is suitable, adhering to Standard III (C), Suitability.
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John Lee, CFA, manages portfolios for several individuals, including his brother. All of Lee's clients are standard fee-paying clients. Lee subscribes to an IPO for only those clients for whom the IPO is suitable, which includes his brother. Lee does not receive the number of shares requested by his clients and allocates shares of the IPO pro-rata to those clients, including his brother. Are Lee's actions most likely consistent with the Standards?
A
Yes
B
No, because he allocates the IPO shares to his brother
C
No, because he fails to allocate the IPO shares to all of his clients
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