Hey, Can someone give me a normal definition for the below terms? I have a pretty good idea what they are, but I’d like to be sure. Blackout period Watch list Rumour list Restricted list Thanks!
look up in the SPH…or don’t you have an index?
this is a good post, thanks. i believe that a stk is added to the restricted list when there is serious potenial for conflict of interest. for example, if a firm has investment banking relationship it will place the stk on the restricted to remove possibility that someone internally could trade based on material, non-public info. watch list - list of stks that is being tracked for possible recommendation, or chg of existing recommendation. blackout period - assume this has something to do when a stk can’t be traded. some IPO’s can’t be traded immediately being taken to market so think that may be example of blackout period. this is my best guess on those terms.
sbmarti2; your a fantastic contributor to this board, glad to help. Blackout Period: Is a period (0 - 60 days) during which employees (PMs/analysts…) may not adjust the investments contained in their plans. Typically they occur when significant events/changes are occurring. Example; In a large firm a blackout period is essentially a large trading ban. In a small firm, the blackout period is likely to prevent a manager from activities such as front running. Watch List: List of securities being monitored particularly closely by a brokerage or exchange to spot irregularities which might be caused by rule violations. Think of this as a by-product of a firewall in a corporation. If you have chinese walls enabled, you don’t really want to say “don’t trade on this security we have non-public material information on”…instead a watch list on that particular security can be monitored closely, and the reasoning behind each can be further investigated if a suspicion is warranted. Rumour List: Wish I could help here, but there is no mention in the SPH of a rumour list that I am aware of and I couldn’t find anything online (although it was a quick search). It if is a prominent topic, i’d be interested if anyone could weigh in. Restricted List: Nothing much to this, its just a list of firms that the firm is unwilling to permit dissemination of opinions, typically because they have an apparent or actual conflict of interest. Once on the restricted list, the company is removed from the research universe and strictly limited to factual information. People may still want to inquire about the security, but responses are limited to factual information only.
A rumour list is simply a list of those firms that are subject to rumours of transactions on the possibilities of insider trading
that’s not for level 1 btw, so not needed for the exam
jgrandits Wrote: ------------------------------------------------------- > this is a good post, thanks. > > i believe that a stk is added to the restricted > list when there is serious potenial for conflict > of interest. for example, if a firm has > investment banking relationship it will place the > stk on the restricted to remove possibility that > someone internally could trade based on material, > non-public info. these tie in with “rumour lists”; you don’t put something on a restricted list if you can’t benefit from some sort of material, non-public information. thus if its on someones restricted list…mix with a “rumour list” and you might make some ca$$h. like i say, its not in SPH…would be cool if someone could add.
Awesome, thanks guys. I didn’t have my ethics book nearby, and I’m really tired today, so I needed someone to just dumb it down for me, haha.