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FRM Part I · FRM Exam Part I · GARP Code of Conduct

An FRM candidate is a risk manager at an asset manager. A broker offers her an expensive trip to a conference abroad, paid entirely by the broker, who is bidding for the firm's trading flow. Which action best conforms to the GARP Code of Conduct?

She should decline the trip, or disclose it to her employer and obtain approval. The GARP Code requires members to avoid benefits that could compromise independence and objectivity and to disclose conflicts of interest promptly, not after the broker's bid is decided.

  1. AAccept, because attending a conference improves her professional knowledge
  2. BAccept the trip but exclude the broker's bid from her own recommendation
  3. CDecline, or disclose the offer to her employer and seek approval, since the gift could compromise her objectivityCorrect
  4. DAccept and disclose it only if the broker wins the business

Explanation

Members must not accept gifts or benefits that could reasonably compromise their independence and objectivity, and must disclose conflicts to the employer. Disclosure only after the outcome (option D) comes too late. Recusing quietly (option B) still involves accepting a compromising benefit without approval.

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