pooled trade

问题如下：

At the end of the day, Wong meets with a long-term client of SWM to discuss SWM’s trade policies. The client identifies two of SWM’s trade policies and asks Wong whether these are consistent with good trade governance:

Policy 1: SWM works only with pre-approved brokers and execution venues, and the list is reviewed and updated regularly.

Policy 2: SWM is allowed to pool funds when appropriate, and executed orders are allocated to the accounts on a pro-rata basis.

Which of SWM’s trading policies identified by the client are consistent with good trade governance?

选项：

A.

Only Policy 1

B.

Only Policy 2

C.

Both Policy 1 and Policy 2

解释：

Correct Answer: C

Both of SWM’s trading policies are consistent with good governance. Asset managers should have a list of approved brokers and execution venues for trading and the criteria used to create this list. Creating and maintaining the list should be a collaborative effort shared by portfolio execution, compliance, and risk management. A best practices approach is to create a Best Execution Monitoring Committee within an investment management firm that is responsible for maintaining and updating the list regularly, or as circumstances require, and for distributing the list to all parties involved in trade execution. Furthermore, if several accounts follow the same or a similar investment strategy and have similar trading needs, then pooling the trades for trade execution may make sense in some situations. If a pooled trade is not fully executed, the order amount that is executed generally needs to be allocated to accounts on a pro-rata basis so that no account is disadvantaged relative to the others.