Dai works as an investment advisor for a firm whose client base is composed of high net worth individuals. In her personal portfolio, Dai has an investment in Torex. has thoroughly researched Torex and believes the company is financially strong yet currently significantly undervalued. According to the GARP Code of Conduct, Dai may:
A. Not recommend Torex as long as she has a personal investment in the stock.
B. Recommend Torex to a client without disclosure as long as it is a suitable investment for the client.
C. Not recommend Torex to a client unless her employer gives written consent to do so.
D. Recommend Torex to a client, but she must disclose her investment in Torex to the client.
Answer:C
Standards 2.1 and 2.2: Conflicts of Interest. Members and candidates must act fairly in all situations and must fully disclose any actual or potential conflict to all affected parties. Sell-side members and candidates should disclose to their clients any ownership in a security that they are recommending.