82,891
edits
Investment Advisers Act of 1940: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 4: | Line 4: | ||
Bungee jumping is an apt metaphor, because as soon as the {{tag|40 Act}} is mentioned in forensic conversation, attorneys will jump (for joy) off the client's bridge and gleefully bounce up and down in the revenue stream drifting on below as long as they possibly can. | Bungee jumping is an apt metaphor, because as soon as the {{tag|40 Act}} is mentioned in forensic conversation, attorneys will jump (for joy) off the client's bridge and gleefully bounce up and down in the revenue stream drifting on below as long as they possibly can. | ||
===Prohibited Transactions - Section 206=== | |||
The Investment Advisers Act makes it unlawful for any investment adviser acting as principal, knowingly to sell any security to or purchase any security from a client without disclosing the capacity in which he is acting and obtaining the client’s consent. Because of the practical difficulties of compliance on a trade-by-trade basis, firms tend to simply refrain from engaging in principal trading with their advisory clients. | |||
Where advisers trade as a principal and on behalf of their clients with the same Broker-Dealer, a technical issue may arise where the Broker crosses buy orders and sell orders, something it may do systematically (see [[systematic internalisation]]. | |||
The key issue is ensuring our crossing engine can be pre-configured not to cross between certain accounts. | |||