Member Article

As a consequence of the recent wave of successful SFC insider dealing criminal prosecutions, responsible officers (ROs) are asking what they need to do to protect their companies and themselves. ROs are obliged to take all reasonable measures to ensure that proper safeguards exist to prevent the licensed corporation and its employees from insider dealing. We have set out below a list of questions for ROs to ask themselves to see whether their internal systems are sufficiently robust. These questions come out of recent insider dealing cases both in Hong Kong and elsewhere.

• Is your Compliance Department asking staff to acknowledge that they have read and understood compliance training related materials before they have even had a chance to open them?
  
• Does everyone who has had insider dealing compliance training remember they had it?
  
• Is the training frequent enough given the nature of the business of your company?
  
• If asked, would any of your employees say anything to the regulators which could embarrass you or the Compliance Department (with cause)?
  
• Do you have accurate records of who attended the training and stayed for the whole time? Where relevant, do you have accurate records of who has completed any on-line training modules?
  
• What happens to staff who don't pay attention during compliance training?
  
• Do you do any "testing" or scenario discussions after training to make sure attendees understood the key messages?
  
• Would employees recognise "material non-public price-sensitive information" if they came across it?
  
• Would they all know what to do with it?
  
• Do they all know the consequences of talking about "material non-public price-sensitive information" to people who have not been brought over the wall?
  
• Does your company have adequate procedures for the handling and safe-keeping of "material nonpublic price-sensitive information"?
  
• How do you stop someone from doing personal trades based on insider information?
  
• Does the Compliance Department keep accurate records of all Personal Account Dealing requests?

We are pleased to provide training for ROs and staff on these practical aspects of Insider Dealing compliance. For further details, please contact Jane McBride on [email protected].