Targeted Examination Request

January 2008

 

Re: Information Barriers

 

FINRA is conducting a review of the policies, procedures and controls with respect to information barriers. To facilitate this review, FINRA requests a copy of the following information and/or documentation:  

 

  1. Organizational charts for the firm's investment banking department (or equivalent department, i.e. financial advisory department) and compliance department.

  2. All written supervisory procedures related to information barriers and other compliance processes designed to control the flow and improper use of material, non-public information obtained by the firm's investment banking or other departments during the normal course of business. In the event these procedures were amended during the course of the review period, please provide the original and amended procedures.

  3. All written supervisory and compliance procedures designed to monitor proprietary, employee, retail and institutional trading in securities placed on the firm's Watch, Restricted or equivalent lists. In the event these procedures were amended during the course of the review period, please provide the original and amended procedures.

  4. All written supervisory and compliance procedures designed to monitor employee trading activity conducted away from the firm for transactions in securities placed on the firm's Watch, Restricted or equivalent lists. In the event these procedures were amended during the course of the review period, please provide the original and amended procedures.

  5. Copies of all materials used in employee education and/or training programs regarding the use of material, non-public information.

  6. A description of all internal surveillance systems and practices designed to review compliance with information barrier procedures, the use and/or the dissemination of material non-public information, monitoring of securities on the firm's Watch, Restricted or equivalent lists, and insider trading. This description should include a listing and overview of all exception reports generated by the firm's internal surveillance programs.

  7. An Excel spreadsheet in electronic format containing the following information related to all consummated or unconsummated merger/acquisition transactions during the review period for which your firm acted as investment banker:
    1. Investment banking client's name;
    2. The name of the security involved;
    3. The type of security (i.e. equity, debt, convertible, etc)
    4. Your firm's role(s) in the transaction (underwriter, co-underwriter, selling group member, advisor, placement agent, etc.);
    5. The first date of contact with the investment banking client regarding the specific transaction;
    6. The date of the public announcement of the transaction;
    7. The date of the completion of the transaction if consummated; and,
    8. The date the security was placed on your firm's Watch, Restricted or equivalent lists.

  8. A list of all internal investigations, whether open or closed, of employee or proprietary account transactions conducted during the period January 1, 2007 through December 31, 2007. This list should include:
    1. The name of the security that was the subject of the investigation;
    2. The date the review/investigation commenced;
    3. An identification of the accounts involved; and,
    4. A summary of the review/investigative disposition.