After 13 months in the making, the Loan Syndications and Trading Association is this week publishing guidelines on the use of material non-public information. The statement of principles guide firms that deal in both loans and public securities on the receipt, use and distribution of confidential information.
In all, about 100 buyside and sellside institutions worked on the principles, said Elliot Ganz, general counsel of the LSTA. "We take this issue very seriously," he said, adding the publishing of guidelines has been a priority of the LSTA for some time. Last year it said it planned to publish principles in 2006 (CIN, 12/23).
Ganz stressed the guidelines do not prescribe how businesses should use non-material private information. Instead, they recommend tools and procedures for firms to follow. Specifically it recommends establishing information walls between business units that have access to material non-public information and those that do not. This could include separate employees, databases and record keeping, as well as limiting or restricting access to files, offices, computers and data.
The exposure draft is posted on the LSTA's Web site.