General Qn: When working for an AM firm, are you generally allowed to trade/invest in equities that the firm holds positions in (even if they are outside of the fund or portfolio you are responsible for?)
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The answer will really depend on the firm you are working at, but I can share my experience...
-the firm had a "restricted list" - equities you could no trade -you had to hold an equity for 30 days -you had to pre-clear any purchases/sales
Some places only require pre-clearance from full-time employees, not interns. Some places don't want you to do any trading, because all of your research should be focused on the portfolio you are helping manage. Some places only care about individual equities, and you can get around the restrictions by trading derivatives.
They typically don't care at all about ETFs.
You probably have to do it through an associated brokerage = high commissions and plenty of restrictions. You may also only be permitted to trade near market close.
Thanks, everyone. Do similar restrictions apply if you work for a financial advisory or wealth management firm or even a fund of funds?
WM and FA - yes.
Funds of funds - depends on what kind of fund of funds, but probabaly less so than in WM, FA and AM.
what if the a/c is in the name of a close family member, like a wife or a parent. I am guessing that just because you work for an AM or WM or MF or HF firm, they can't restrict your close family from trading in their own a/c. And I am specifically talking here about trading stocks (smaller caps) that the firm probably has no coverage or any activity in, so there would not be any conflict of interest (or any danger of front running, etc.)
If you have a direct interest then yes, they will restrict. Either way, you will need to disclose all accounts that you have access/discretion over because that may influence your decisions/trading patterns.
Thanks LAWM.
How do you evaluate 'direct interest' or 'access/discretion' - what if your name is not even on the trading account?
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