Ian, a tax manager, has a broker that executes trades on his behalf. His broker reached out to him with a new investment opportunity, noting that Ian needs to make a decision immediately or risk missing out on the potential financial gains. When Ian’s broker searched for the investment in KICS, she found no results. What should Ian do?
", "instructionText": "Select the correct option, and then select Submit to proceed.", "downloadAndroidImages": "kc_icon.png,kc_assets_3.png,kc1_icon1_h.png,kc1_icon1.png,kc1_icon2_h.png,kc1_icon2.png,kc1_icon3_h.png,kc1_icon3.png,kc1_icon4_h.png,kc1_icon4.png,kc_assets_2.png", "downloadIpadImages": "kc_icon.png,kc_assets_3.png,kc1_icon1_h.png,kc1_icon1.png,kc1_icon2_h.png,kc1_icon2.png,kc1_icon3_h.png,kc1_icon3.png,kc1_icon4_h.png,kc1_icon4.png,kc_assets_2.png", "downloadImages": "kc_icon.png,kc_assets_3.png,kc1_icon1_h.png,kc1_icon1.png,kc1_icon2_h.png,kc1_icon2.png,kc1_icon3_h.png,kc1_icon3.png,kc1_icon4_h.png,kc1_icon4.png,kc_assets_2.png", "MCQ": { "responseType": "specific", "maxAttempts": "1", "correctAnswer": "2", "options": { "option": [ "A. Ian may advise his broker to acquire the investment on his behalf, because his broker has done her due diligence to confirm the permissibility.
", "B. Ian should also check KICS. If the entity is not found, he should submit an inquiry to Risk Management - Independence for assistance in determining the entity’s restriction status, before allowing his broker to acquire the investment on his behalf.
", "C. To avoid missing out on the investment opportunity, Ian’s broker is permitted to acquire the investment on his behalf. If it is restricted, Ian will be able to dispose of it within 7 days to avoid an independence violation.
", "D. As long as Ian submits an inquiry to Risk Management - Independence to confirm the permissibility of the investment, his broker may proceed to acquire the investment on his behalf. Since the investment opportunity is time-sensitive, Ian does not need to wait for a response to his inquiry before his broker executes the trade.
" ] }, "feedback": { "genericResponse": { "incorrect": { "audio": "blank", "content": "" }, "solution": { "audio": "blank", "content": "" }, "correct": { "audio": "blank", "content": "" } }, "specificResponse": { "response": [ { "audio": "", "timeStamps": [], "content": "You chose A, that’s incorrect. Although Ian’s broker trades on his behalf, it is ultimately Ian’s responsibility to confirm that investments are not restricted before he acquires them. If the entity is not found in KICS, Ian must obtain conclusive evidence that the entity is not restricted before he or his broker acquires the investment.
Correct response B. Ian should also check KICS. If the entity is not found, he should submit an inquiry to Risk Management - Independence for assistance in determining the entity’s restriction status, before allowing his broker to acquire the investment on his behalf.
" }, { "audio": "", "timeStamps": [], "content": "You chose B, that’s correct. Since the entity was not found in KICS, Ian must obtain conclusive evidence that it is not restricted before allowing his broker to acquire the investment on his behalf. Ian may submit an inquiry to Risk Management - Independence for assistance in determining restriction status and must await confirmation that the entity is unrestricted before he or his broker acquires the investment.
" }, { "audio": "", "timeStamps": [], "content": "You chose C, that’s incorrect. Even when there are time constraints on a potential investment opportunity, you still have a professional responsibility to ensure the entity is unrestricted before acquiring it. Ian is required to confirm the permissibility of his investments before making them. If he invests in a restricted entity without confirming its permissibility, it is considered an independence violation regardless of when he disposes of the investment.
Correct response B. Ian should also check KICS. If the entity is not found, he should submit an inquiry to Risk Management - Independence for assistance in determining the entity’s restriction status, before allowing his broker to acquire the investment on his behalf.
" }, { "audio": "", "timeStamps": [], "content": "You chose D, that’s incorrect. The act of submitting an inquiry to Risk Management – Independence alone does not ensure that Ian will avoid an independence violation. He must await confirmation or other conclusive evidence that the investment is not restricted before he proceeds with the transaction. If he fails to do so before making the investment, he could incur an independence violation and possible financial sanction if the entity turns out to be restricted.
Correct response B. Ian should also check KICS. If the entity is not found, he should submit an inquiry to Risk Management - Independence for assistance in determining the entity’s restriction status, before allowing his broker to acquire the investment on his behalf.
" } ] } } } } }