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READING 4: TRADE ALLOCATION: FAIR DEALING AND DISCLOSURE
MODULE 4.1:
TRADE ALLOCATION
LOS 4.b: Describe appropriate actions to take in response to trade allocation practices that do not adequately respect client interests.
Appropriate responses to inadequate trade allocation practices include the following:
1. Get advanced indication of client interest regarding any new issues.
2. Distribute new issues by client, not by portfolio manager.
3. Have in place a fair and objective method for trade allocation, such as pro rata or a similar system.
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4. Be fair to clients regarding both execution of trades and price.
5. Execute orders in a timely and efficient manner.
6. Keep records and periodically review them to ensure that all clients are being treated equitably.
