Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Ethics and Regulation in the Professional Asset Management Industry
Asset management is an operation that involves the diligent management of the investor's funds in a professional way. The asset manager thus is an agent hired to do the job on account of his or her peculiar financial ability. Professional firms that are into asset management thus have duties not only to the investors, but also to the stock market, the financial and government bodies in keeping their activities above board. The managers are often entrusted with the task of dealing with billions of dollars or assets of like proportions. It is when dealing with such a huge cash flow that there comes the problem of ethical dilemmas. The unethical models of behavior has brought forth many regulations and guidelines that have been issued by the government and the financial agencies -- these form the laws and other than that the managers are obliged to follow an ethical code of conduct that form a part of the ethical standards. The manager shall thus adopt standards that are highly mindful of the interests of the investor. (Reilly; Brown, 2011)
Some of the laws that have been passed to regulate the industry include the 'Employee Retirement Income Security Act -- ERISA' for retirement asset managers and fiduciaries, 'Pension Protection Act of 2006' for pension fund sponsors and managers, and the securities laws for the asset management industry which began with the Securities Act of 1933 and the Securities Exchange Act of 1934 and many other acts like the Investment Company Act of 1940 and especially the Investment Adviser...
Later acts are the 'Dodd Wall Street' reform and the consumer acts. The clauses of these laws have to be obeyed and they are not obligatory but mandatory. Ethics however involves individual perception and have not the exact force of the law as these acts. (Reilly; Brown, 2011)
The Ethics, Law and the Fund Manager
The ethics of the managers may be based on the individual as argued before. Taking this further and devolving into the reasons why the actions of managers may not be always rational and also ethical, it has to be noted that financial and managerial are provided by individuals who are in organizations that are not based on rational actions because the organization comprises of multiple "egos, politics, and hidden agendas." (Schminke, 1998) Therefore the premise that managers will not always act rationally is a valid premise. Therefore ethical decision making depends on the manager being a rational decision maker also. Thus that premise being wrong, it is seen that ethical decision making likewise may twist the ethical dilemmas, and the solutions that the manager arrives at the best choice.
There are many issues that involve moral and ethical considerations in all spheres of investment. The field of activity being the financial markets, where many commodities, stocks and currencies are traded, the market itself has a basic ethical requirement to be fair, and the fairness in the market means the absence of unfair trading practices, and wrongful activities. These are sometimes left to the market itself to correct…
References
Bines, Harvey E; Thel, Steve. (2004) "Investment Management Law and Regulation"
Aspen Publishers.
Boatright, John R. (2010) "Finance Ethics: Critical Issues in Theory and Practice"
John Wiley and Sons.
Accepting Client Assignments Outstanding client service begins with a full understanding of the client organization, its business needs and the position to be filled. An AESC member should: Accept only those assignments that a member is qualified to undertake on the basis of the member's knowledge of the client's needs and the member's ability to perform the specific assignment. Disclose promptly conflicts of interest known to the AESC member and accept assignments only
Managing Diversity in the Workplace The modern business environment is marked by numerous people-oriented variables brought to organizations. These variables include gender, race, age, and religion, and socioeconomic background, regional and national origin. All these factors form the current workforce in the market place. Diversity is widely recognized as one of the world's greatest strengths. Diversity continues to affect the society and the organizational workforce in the process of shaping the
Ethics and the Military As globalism becomes more of a reality, and as various developing countries increase the amount of interaction they do with developed countries, many cultural issues arise. Doing business is not the same worldwide, and as citizens of a global village, we must realize that there are different cultural norms and behaviors that are acceptable in some countries, unacceptable in others, and even expected in some. In the
Management v. Auditors Responsibility Responsibilities of Management and Auditors & the Public Perception series of high-profile business melt-downs in 2001, led by the Enron scandal have put the roles and responsibilities of the corporate management and the auditors in sharp focus. The public outcry against the necessity of preventing such crises in future has led to stricter regulation and extensive debate about the responsibilities of the management and the auditors. In
Ethics of Accommodating Religion As the diversity within businesses increases at an alarming pace with the entire world transforming into a global village, employers, employees and legislators are all concerned about accommodating religious beliefs and observances. With the signing of Title VII that permits employees to observe the tenets of their religion at workplace, employers are planning how to obey the laws and utilize the religious accommodation as a growing strength
Ethics for Non-Profits Introduction century ago, corporate social responsibility was an idea whose time had not yet come, and companies were free to treat their employees as badly as they could get away with and cause nearly unregulated environmental damage. Profits were considered the only measure of how good a company was, and higher profits were often derived from unethical treatment of workers and resources. Such an attitude today is no longer