Series 14: 6.1.8.1.2. Review Of Proprietary And Employee Trading

6.1.8.1.2. Review of Proprietary and Employee Trading

Every firm involved in investment banking (among other activities) must maintain watch and restricted lists, and must review proprietary and employee trading in the securities on such lists. A firm’s Chinese wall policy must address both of these issues.

• First, the policy should explain why, when, and how a security is placed on or deleted from a watch list or restricted list. A watch list is a list of securities subject to strict scrutiny by the firm’s compliance department. There is usually no restriction on trading in securities on the watch list, and the list is not widely distributed. The restricted list, however, is usually distributed to employees throughou