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

An FRM is offered a lavish all-expenses-paid trip by a vendor whose risk software the member's firm is evaluating, and the member sits on the selection committee. Which action is most consistent with the GARP Code of Conduct?

He should decline the trip, or disclose it fully to the employer before participating in the selection. The GARP Code requires members to avoid or disclose gifts and relationships that could reasonably compromise objectivity, and disclosure must be timely and open, not delayed or hidden.

  1. AAccept the trip and disclose it only if the vendor wins
  2. BAccept it because the vendor has not asked for anything in return
  3. CDecline it, or fully disclose it to the employer so the conflict can be managed before taking part in the selectionCorrect
  4. DAccept it and abstain from voting without telling anyone

Explanation

A gift that could reasonably impair objectivity creates a conflict that must be avoided or disclosed up front. Waiting to disclose until the vendor wins is too late, and a lack of explicit request does not remove the influence. Quietly abstaining hides the conflict instead of disclosing it.

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