A Career in Compliance?
"Inside information" is any non-public information about the securities, activities or financial condition of a corporation, public entity, governmental body or other issuer of securities, which, if made public, would be likely to have an effect on the price of that issuer's securities. An example; information about a take-over of a company may be price-sensitive in relation to other companies in the same sector. This leads onto:
Chinese Walls
Chinese Walls are barriers to the passing of information. They are designed to manage confidential information and prevent in inadvertent spread and misuse information. Many banks have set up certain Global Chinese Walls policies.
'Those areas that routinely have access to inside information (e.g. Corporate Finance), and which are considered "inside areas", must be physically separated from those areas that deal in or advise on a financial instruments (e.g. Treasury and Markets), which are considered "public areas"'.
Insider Dealing
Recognising Insider Dealing can be difficult; therefore certain rules are set up which are governed by Compliance experts. It is a pre-requisite that any member of staff will need to liaise with compliance if they, their spouse or immediate family are looking to trade. If there is a suspicion that any individual has prior knowledge regarding a deal (e.g. Corporate Finance) the bank could be exposed. This is another critical roll of compliance to ensure that this is not able to happen.
Wall Crossing on occasions happens to assist an 'inside area' on a transaction and thereby receive inside information. This is a procedure controlled by Compliance.
