Stepping out of the Shadows: The SEC’s Novel Approach Creating Heightened Regulatory Requirements
Without question, the SEC’s novel approach to insider trading has caused ripple effects throughout the industry, with some questioning whether any regulations will come to pass and others beginning to implement stricter protocols in advance of said rulings.
For those new to the concept, shadow trading is, “the practice in which corporate insiders use confidential nonpublic information to facilitate trading in economically linked firms in an effort to avoid insider trading laws.”
In other words, the tracking and monitoring of critical MNPI just got that much more important, and that much more complex.
To get a better understanding of the impact of shadow trading from a firm’s perspective, we polled the audience of a recent webinar, asking participants whether they believed they were doing enough to track their critical MNPI. The response?
- 41% felt confident about their monitoring of possible insider trading activity across your firm
- 26% felt mostly confident
- 32% felt there was room for improvement
- 1% felt it wasn’t applicable
While a higher percentage did lean towards confidence, it was the mostly confident and the room for improvement percentages – accounting for 58% of responses – which highlighted a clear need for firms to do more…especially in light of the SEC’s focus on shadow trading and the expectation of forthcoming regulations.
So, where do you land? Are you confident your policies and procedures will hold up under the harsh light of new SEC rulings? Or do you think there is room for improvement across your firm?
Discover how COMPLY can help you track MNPI, proactively mitigating insider trading risk. Schedule a demo today!