IACCP MASTER COMPREHENSIVE PAPER
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
⩥ Transactions related to what types of holdings does the Code mandate
as requiring pre-clearance? Answer: IPOs and private placements
⩥ What are the Code requirements as related to Blackout Periods and
Restricted Lists? Answer: None specifically required/mandated by the
Rule/SEC.
However, advisers often implement additional firm-tailored procedures
to include prohibitions on certain trading, black-out periods on trading,
restrictions on outside activities, accepting/giving of gifts/entertainment,
charitable contributions, and pay-to-play (political contribution) policies.
⩥ What is the SEC/Act's stance on allocating client trade orders?
Answer: None directly however, no-action relief (SMC Capital) permits,
but does not require, aggregation of client orders under certain
circumstances. Additionally, orders involving proprietary accounts are
permitted when appropriate procedures are followed.
⩥ Define aggregation of client trade orders and the pros/cons Answer:
Combining orders of the same security for several clients into a single
order
,Pros: adviser can generally improve price, transaction costs, and other
aspects of trade execution
Cons: potential conflict of interest as not all clients may have purchased
at same time for same price
⩥ Under what circumstances is the aggregation of client trade orders
permitted (appropriate parameters/circumstances)? Answer: 10
Conditions:
1) Disclose aggregation policies
2) Consistency with seeking best execution
3) Fair & equitable treatment
4) Written allocation statement
5) Partial fills
6) Alternative allocation procedures
7) Maintain B&R
8) Custody
9) No additional compensation/remuneration
10) Each advisory client receives individual advice & treatment
⩥ Review of Enforcement Cases & SEC Guidance Answer: Gardner
Russo & Gardner = Cross-transactions between client and affiliated
accounts
, Pretzel & Stouffer = Timing of allocation decisions and post-trade
changes to initial allocation statements; Pro-rata allocation is not the
only fair method if allocation
SMC Capital = Aggregation of client trade orders & orders involving
proprietary accounts
⩥ What should be disclosed to clients should an adviser decide not to
aggregate client orders? Answer: That the adviser will not aggregate and
the potential consequences of not aggregating
⩥ What are the acceptable (fair process) allocation methods? Answer:
Pro-rata
Rotation of orders to specific accounts
Random allocation
Alternative allocation
⩥ What disclosures could be made by advisors choosing to
recommend/invest new issues on behalf of clients? Answer: Potential
effects of IPO or new issue allocations on performance of client's
account(s) or performance composites
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
⩥ Transactions related to what types of holdings does the Code mandate
as requiring pre-clearance? Answer: IPOs and private placements
⩥ What are the Code requirements as related to Blackout Periods and
Restricted Lists? Answer: None specifically required/mandated by the
Rule/SEC.
However, advisers often implement additional firm-tailored procedures
to include prohibitions on certain trading, black-out periods on trading,
restrictions on outside activities, accepting/giving of gifts/entertainment,
charitable contributions, and pay-to-play (political contribution) policies.
⩥ What is the SEC/Act's stance on allocating client trade orders?
Answer: None directly however, no-action relief (SMC Capital) permits,
but does not require, aggregation of client orders under certain
circumstances. Additionally, orders involving proprietary accounts are
permitted when appropriate procedures are followed.
⩥ Define aggregation of client trade orders and the pros/cons Answer:
Combining orders of the same security for several clients into a single
order
,Pros: adviser can generally improve price, transaction costs, and other
aspects of trade execution
Cons: potential conflict of interest as not all clients may have purchased
at same time for same price
⩥ Under what circumstances is the aggregation of client trade orders
permitted (appropriate parameters/circumstances)? Answer: 10
Conditions:
1) Disclose aggregation policies
2) Consistency with seeking best execution
3) Fair & equitable treatment
4) Written allocation statement
5) Partial fills
6) Alternative allocation procedures
7) Maintain B&R
8) Custody
9) No additional compensation/remuneration
10) Each advisory client receives individual advice & treatment
⩥ Review of Enforcement Cases & SEC Guidance Answer: Gardner
Russo & Gardner = Cross-transactions between client and affiliated
accounts
, Pretzel & Stouffer = Timing of allocation decisions and post-trade
changes to initial allocation statements; Pro-rata allocation is not the
only fair method if allocation
SMC Capital = Aggregation of client trade orders & orders involving
proprietary accounts
⩥ What should be disclosed to clients should an adviser decide not to
aggregate client orders? Answer: That the adviser will not aggregate and
the potential consequences of not aggregating
⩥ What are the acceptable (fair process) allocation methods? Answer:
Pro-rata
Rotation of orders to specific accounts
Random allocation
Alternative allocation
⩥ What disclosures could be made by advisors choosing to
recommend/invest new issues on behalf of clients? Answer: Potential
effects of IPO or new issue allocations on performance of client's
account(s) or performance composites
