Responsibilities of a Portfolio Manager to Employer and Confidentiality

Very Hard Professional Standards Application Responsibilities To Employers

Jacob is a portfolio manager at a private wealth management firm. He recently developed a new quantitative trading strategy that he believes could significantly enhance his firm's performance. Before implementing this strategy across client accounts, Jacob shares his ideas with his firm’s research department and requests feedback. The head of research, without Jacob’s consent, decides to disseminate Jacob’s strategy to a separate hedge fund to explore trading partnerships that could benefit the firm. This raises a question about Jacob's responsibilities to his employer under the CFA Institute's Code of Ethics and Standards of Professional Conduct.

Given this scenario, which of the following actions would best align with Jacob's professional responsibilities to his employer?

Jacob should immediately implement the strategy for his clients without waiting for the feedback to avoid any risk of the strategy being appropriated.

Jacob should formally document his strategy and ensure that his firm establishes appropriate internal policies regarding the confidentiality of proprietary information.

Jacob should confront the head of research to prevent any potential misuse of his strategy, regardless of whether this creates internal conflict.

Hint

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