Which policy relates to employees trading securities for their personal accounts?

• A. Risk management policy
• B. Investment decision-making policy
• C. Personal account dealing policy
• D. Compliance monitoring policy

Answer: (C)

The personal account dealing policy is specifically designed to govern how employees can engage in trading securities for their own accounts. This policy is crucial in the context of preventing conflicts of interest and ensuring that employees do not misuse their access to non-public or material information that could influence market behavior. It establishes guidelines on what types of trading are permissible, any required disclosures, and the processes employees must follow to report their personal trades.

The existence of such a policy helps maintain the integrity of the firm’s operations and protects both the firm and its clients from unethical trading practices. By having a clear framework, the policy ensures transparency and accountability regarding employee transactions, reinforcing trust within the organization and with external stakeholders.