Mitigating Insider Trading Risks: Relevant Laws and Regulations; Internal Controls; Restricted Lists; Confidentiality Agreements; Personal Trading; Testing; and Training (Part One of Two)

Insider trading is a perennial SEC focus area. A recent ACA Compliance Group (ACA) program featuring Joel Stocksdale and Erika Chua, ACA senior principal consultant and principal consultant, respectively, offered a comprehensive overview of common insider trading risks and the controls that fund managers can implement to mitigate those risks. This article, the first in a two-part series, covers the portions of the program that addressed relevant laws and regulations; internal controls applicable to all advisers; restricted lists; confidentiality agreements; personal trading; testing; and training. The second article will highlight specific controls related to common sources of insider trading risk, including expert networks, political intelligence, meetings with management, data rooms, information barriers and office sharing. For additional commentary from ACA, see “ACA Panel Reviews Effects of Impending MiFID II on U.S. Advisers” (Dec. 7, 2017); and “The SEC’s Proposed Form CRS: Does It Accomplish Its Goals? (Part Two of Two)” (Jun. 7, 2018).

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