Ethics and Professionals

canipungoel
Good Student
Posts: 27
Joined: Mon Feb 23, 2015 3:38 am

Ethics and Professionals

Postby canipungoel » Thu Mar 12, 2015 9:26 am

Question-1 What is the difference between watch list, Restrictive List and Rumour List?
Question-2 What is the meaning of Mezzanine Financing and Fund-of Fund investment?
Question-3 What is the meaning of "Partial Fills" when trades are grouped or in a block for efficiency?
Question-4 What is the meaning of Soft Dollar arrangement?

canipungoel
Good Student
Posts: 27
Joined: Mon Feb 23, 2015 3:38 am

Ethics and Professionals

Postby canipungoel » Sun Mar 15, 2015 3:49 pm

Please reply

edupristine
Finance Junkie
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Joined: Wed Apr 09, 2014 6:28 am

Ethics and Professionals

Postby edupristine » Mon Mar 16, 2015 9:54 am

Restrictive list: basically says that the financial advisor can not solicit the stock to his clients/family etc.
Watch Lists: by brokerage firms are usually an analysts idea for a group of stocks to watch.
Rumor list: It is a list that comprises stocks that can be quickly looked at that may have a reason for their price right now.

Question-2 Mezzanine Financing: A company issues debt that should be repaid in due course otherwise holders may convert it into equity. It is often a more expensive financing course .
Fund of funds:- An investment strategy of investing in a portfolio of other investment funds rather than investing directly.
Question 3: Partial fills: Example- You have an order for 100,000 shrs of xyz for 5 clients but are only executed (filled) on 50,000 shares. that’s a partial fill. you must develop a policy that treats the clients fairly for allocating this stock. for example, giving all of the shares of winning trades to your favorite accounts and losing trades to other accounts won’t fly. cfa likes the pro rata allocation method.
Question 4: Soft dollar arrangement: It involves using a client brokerage commissions to purchase research that helps to make investment decisions.

canipungoel
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Posts: 27
Joined: Mon Feb 23, 2015 3:38 am

Postby canipungoel » Wed Mar 18, 2015 5:16 am

Please describe the watch list and rumour list in other words with the help of examples. I did not understand your answer.

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Ethics and Professionals

Postby edupristine » Fri Mar 20, 2015 5:06 am

Hi, answer to your query is as follows:

A watch list is used by brokerage firms or companies where there is a suspect of irregularities, potential for insider trading or any other corruption. For example: a brokerage firm has a watch list for the companies indulged in regulatory violations.
A watch list can also be used as a monitoring tool for potential trading and investing opportunities of securities. For example: an investor is waiting for criteria to be met such as breaking a 52 week range before placing the order for a certain level of volume.

Rumor list is simply a list of those companies that have rumors of suspected transactions with the possibilities of insider trading. For example Brokerage firm has a list of companies which they are keeping a close eye on trading with the suspected transactions and possibilities of insider trading.


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