Portfolio Management Q135

135Mr. Amjad Mirza, director of Acme &Co. (a publicly listed company) cannot trade his company’s stock at certain points of the year when disclosure of financial results are pending. What step regarding this restriction is most appropriate for Salahuddin Shaukat, who is managing Mirza’s fund, in preparing a written investment policy statement (IPS)?

Option : A
Explanation : When a client has a restriction on trading, such as this obligation to refrain from trading, the IPS “should note this constraint so that the portfolio manager does not inadvertently trade the stock on the client‟s behalf.”

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