Chartered Alternative Investment Analyst (CAIA) Practice Exam 2025 – All-in-One Guide to Master Your Certification!

The statement that client accounts of non-relatives should have priority over the client accounts of relatives violates the CFA Institute Standard VI(B), which addresses the priority of transactions. According to this standard, members must prioritize their clients' interests over their own interests and those of their family members.

This means that when executing transactions, the member must ensure that all clients are treated fairly and that no preferential treatment is given based on personal relationships. Prioritizing non-relatives over relatives contravenes this principle of fairness and equitable treatment among clients.

The other statements align more closely with the standards set forth by the CFA Institute. Imposing restrictions on members' participation in private placements and IPOs can be seen as a means to protect client interests and maintain integrity in transactions. Additionally, emphasizing that client transactions take precedence over the personal transactions of the member and the transactions of the member's firm reinforces the obligation to put clients first.