To prevent insiders from wielding unfair market advantage, regulators have explicit guidelines surrounding the sharing of MNPI among corporate insiders in advance of trading and investment deals. MCO makes selective insider information sharing a whole lot easier, a positive development when it comes to protecting material non-public information (MNPI) in compliance with securities laws and regulations.
Track Insiders in Compliance with Market Abuse Regulations
Under regulations such as MAR Article 11, givers and receivers of MNPI are held to regulatory guidelines, such as the requirements on disclosers and recipients when a potential investor is wall-crossed, i.e., MNPI is shared. Companies must electronically maintain and keep certain records, such as lists of insiders for five years, and be prepared to supply such lists to regulators upon request.
The information to be stored and accessible includes:
- the list of all persons receiving inside information;
- date/time of planned information sharing, such as market soundings;
- the list of any investors who might refuse MNPI sharing and/or soundings;
- the facts relevant to the assessment if/when inside information ceases to be such;
- the discloser's written procedures related to MNPI sharing such as market soundings.
Many deal teams, investment and compliance professionals use Excel spreadsheets to manually track insider lists. These manual methods are unstructured, inefficient and error-prone.
MyComplianceOffice makes insider list management easier by enabling users to create insider lists, complete with individuals and roles/rights assignments, timeframes when individuals can access inside information as well as a cross-referenceable hierarchical database of securities listings and company information on tens of thousands of entities.
With MCO, compliance professionals can create and access insider lists in a matter of minutes. Such lists includes people conferred with temporary access based on discrete events, such as a deal, corporate event and/or publication of financial statements or profit warnings. It also includes people who, by the nature of their roles, present permanent potential conflicts when exposed to MNPI. This would include deal or investment team members, senior executives and compliance professionals.
Importantly, unlike manual methods, automated insider trading lists support standardized data management formats for sharing insider lists in accordance with regulatory guidelines.
Learn more about MCO's risk and compliance solutions.
