Exercise
Answer the following questions.
- 1. Which of the following statements best describes an aspect of information barriers?
- A. Information barriers must be established and reviewed on a semiannual basis.
- B. Information barriers are a mechanism to prevent insider trading.
- C. Information barriers permit sharing of information between the investment banking and trading departments of a firm.
- D. Information barriers facilitate sharing of information between the investment banking department and portfolio managers of a firm.
- 2. Many companies have policies in place that help prevent insider information from being available to other departments. This is an example of:
- A. Isolation policy
- B. A Chinese Wall
- C. Segregation processes
- D. A castle barrier
- 3. When an investment banking department needs information from the research department on a watch list security, what should they do according to FINRA’s “Chinese Wall” policy and procedure?
- A. Nothing. An investment banker should never bring a research employee “over the wall.”
- B. The investment banker could bring the employee “over the wall.”
- C. The investment banker could go “over the wall.”
- D. Information on watch list securities is generally not information that is kept “behind the wall.”
Answers
- 1. B. Information barriers are procedures within an organization that segr