CIPR 3.6.1 Personal account transactions — systems and controls
(1) This rule applies to transactions by an authorised firm for the account of a relevant person. In this rule, such a transaction is called a personal account transaction.
(2) A member of the firm's governing body is a relevant person for this rule. Also, an employee or agent of the firm is a relevant person for this rule unless:
(a) he or she is not involved to any significant extent in the firm's business and does not have access to information about that business; and
(b) the firm has taken reasonable steps to be sure that he or she is not so involved and does not have access to such information.
(3) An authorised firm must establish and maintain systems and controls to ensure that:
(a) if a relevant person enters into a personal account transaction, the transaction does not conflict with the firm's duties to its customers; and
(b) if a relevant person enters into such a transaction, the firm is promptly notified (or is otherwise able to identify the transaction) and makes a record of it.
(4) The systems and controls must ensure that a relevant person who is not permitted under the firm's policies to enter into a personal account transaction does not (except in the proper course of his or her employment or authority) arrange for another person to enter into the transaction, nor communicate an opinion about it to another person, if he or she knows or reasonably ought to know that, as a result, the other person will be likely to enter into the transaction or arrange for another person to do so.
(5) The systems and controls must include:
(a) making relevant persons aware, by notice in a durable medium, of the restrictions on personal account transactions, and any general permissions to enter into such transactions;
(b) making compliance with the systems and procedures a term of each relevant person's employment contract, contract for service, or other employment or appointment arrangement;
(c) keeping a restricted list of relevant investments about which the firm may have inside information and ensuring that only relevant persons have access to the list;
(d) ensuring that a relevant person may not enter into personal account transactions in relation to relevant investments on the restricted list unless:
(i) the transaction is for the purpose of realising the cash value of a holding or position undertaken to meet an obligation of the person that is not related to the firm's business; and
(ii) the firm has given its express permission, in a durable medium, for the transaction.
(6) In subrule (5):
inside information means:
inside information means:
(a) information that:
(i) relates to particular securities, a particular issuer of securities, a particular class of securities or a particular class of issuers;
(ii) is specific or precise;
(iii) has not been made public;
(iv) would be likely, if it were made public, to have a significant effect on the price of any securities; and
(v) is obtained from a source closely connected to the issuer of the securities or 1 or more issuers of a class of securities; or
(b) information that is inside information under rules made under FSR, article 83 (Rules relating to market abuse).
|Derived from QFCRA RM/2019-2 (as from 1st January 2020).|