Can anyone please explain me Proprietary trading procedure ( standard II -integrity of capital markets)…
No one…
I mean, your question is ambiguous. What exactly are you having trouble with? The highlight of this section is to create a firewall within a firm to prevent proprietary trading while in possesion of material information. From Schweser:
"Information is “material” if its disclosure would impact the price of a security or if reasonable investors would want the information before making an investment decision. Ambiguous information, as far as its likely effect on price, may not be considered material. Information is “nonpublic” until it has been made available to the marketplace. An analyst conference call is not public disclosure. Selectively disclosing information by corporations creates the potential for insider-trading violations. The prohibition against acting on material nonpublic information extends to mutual funds containing the
subject securities as well as related swaps and options contracts. "
Thanks 215CFA for taking some interest in my query…
I am reading ethics from the curriculum…its too detailed and comprehensive…
Actually i am not understanding the following statement…
A probibition on all types of proprietary activity when a firm has material non public info-is not appropriate…for example when a firm acts as a market maker a prohibition on proprietary trading may be counterproductive to the goals of maintaining the confidentiality of info and market liquidity
the page number is 53 of curriculum
thks