A bank is promoting a property fund to its customers. However, the fund is about to buy a property owned by a subsidiary of the bank. In relation to promoting this property fund to its customers, the Consumer Protection Code requires the bank to:

• A. Not sell this property fund to customers until after the fund has purchased the property in question.
• B. Seek written confirmation from potential investors that they are aware of the conflict of interest and still want to proceed with the investment.
• C. Give investors a 30-day cooling off period.
• D. Immediately seek the permission of the Central Bank to continue marketing the fund to its clients.

Answer: (B)

When there is a potential conflict of interest in marketing a financial product, the bank must be transparent about the conflict and secure the investor’s informed consent in writing. Here, the property fund being offered would purchase a property owned by a bank subsidiary, creating a clear conflict of interest that could influence the investment decision. The Consumer Protection Code requires the bank to disclose this conflict and obtain written confirmation from potential investors that they understand the situation and still want to proceed. This protects investors by ensuring their decision is informed and not swayed by internal interests. The other options don’t address this crucial disclosure and consent requirement, and there’s no CPC rule mandating a cooling-off period, delaying the sale, or seeking Central Bank permission to market the fund in this context.