C is correct, as Standard (V)–Diligence and a Reasonable Basis requires members and candidates to have a reasonable and adequate basis, supported by appropriate research and investigation, for any investment analysis, recommendation, or action. Relying solely upon attendance at a one-day conference listening to industry experts to make an investment recommendation, especially when the industry experts have based their recommendations upon price data only, would not meet the requirements of the Code and Standards with regard to Diligence and a Reasonable Basis. 

A is incorrect because there has not been a violation of this standard. 

 B is incorrect, as even though the portfolio manager has allocated a portion of her portfolio to an asset class she recommended for clients there has not been a violation of this Standard since the manager has not front run any of her clients.

C is correct because there is no indication Mbuwanga’s recommendation is based on any compensation package based on sales targets as being part of the sales team. If he had a sales target as part of his responsibility to promote the new product, it could be conceived his independence and objectively was in question. Mbuwanga does however seem to be in violation of Standard III(C)–Suitability in that while research with regard to correlation was undertaken, an analysis based on each individual client’s return and risk objectives was not done. He may also be in violation of Standard I(A)–Knowledge of Law in that he would need to determine if the Kenyan REIT product is allowable in each of the countries where his clients reside. 

 A is incorrect because while research with regard to correlation was undertaken, an analysis based on each individual clients’ return and risk objectives was not done. 

 B is incorrect as the new REIT products are being recommended to all clients based on new regulations introduced in Kenya. Mbuwanga may be in violation of Standard I(A)– Knowledge of the Law depending on the rules and regulations in each of the African countries where his clients reside if those regulations do not allow investments outside of the country and/or in this investment type.