NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Ethical Issues
Which of the following is an example of an adviser breaching the ethical duty of confidentiality towards a client?
Sharing a client's portfolio details with a friend at a party breaches confidentiality, because client information may be used only for the engagement and disclosed only with consent or under legal requirement. Secure storage, purpose-limited use and lawful disclosure to a regulator are all acceptable.
- ASharing the client's portfolio details with a friend at a partyCorrect
- BStoring client records securely as per policy
- CDisclosing client data to a regulator on a lawful request
- DUsing client data only to deliver the agreed advice
Explanation
Client information must be kept confidential and used only for the engagement. Disclosure to a regulator under lawful requirement is permitted, and secure storage and purpose-limited use are proper practice. Sharing details socially is an unauthorised disclosure.
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