Question of the Week

John King, a CFA, resides in Jurisdiction A, where the securities laws and regulations are more strict than the Code and Standards. However, he performs his business in Jurisdiction B, where the securities laws and regulations are less strict than the Code and Standards. Although Jurisdiction A's law applies, it states that law of locality where business is conducted governs. Which law must King adhere to?

a) Jurisdiction A's law
b) Jurisdiction B's law
c) The Law of Locality
d) The Code and Standards

Answer:

The correct answer is d.

Since the Law of Locality applies, and King performs his business in Jurisdiction B (where securities laws and regulations are less strict that the Code and Standards), he must follow the Code of Standards. As the AIMR Standards of Practice Handbook states, it is not acceptable for members to conduct activities that are are in violation of the Code of Standards, even if it is legal in the Jurisdiction where business is conducted.

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