Propose practices and procedures that stop breaches of the ethics Code and the Standards of Professional Conduct before they occur

Firms control personal-trading conflicts with a written policy: preclearance of trades, blackout periods around client orders and rating changes, duplicate confirmations sent to compliance, holdings reports at hiring and periodically after, and limits on IPOs and private placements, with any permitted participation precleared. The policy should be disclosed to clients on request. For disclosure, analysts should give specific, prominent statements of holdings, directorships and banking relationships in each report. For referrals, employers should approve arrangements in advance and receive at least quarterly updates on the fees paid and received. The trap is preferring an after-the-fact report; preclearance works because it catches a conflict before the trade is made.