Financial regulators in the U.S. and UK have recognized the risks posed by market volatility, remote working, and delayed public disclosure and filings during the COVID-19 pandemic. They are focused on monitoring how firms are surveilling their firm-wide and employees’ personal trading activity, employee conduct, e-comms, telephone conversations, and other surveillance practices to detect potential risk, compliance, and conduct-related issues.
With employees working remotely, this risk can be more difficult to monitor without having the right tools in place. But we know the risk is real: ACA’s surveillance specialists observed a 77% increase in personal trading activity by users of our employee personal trading solution during the second half of Q1 2020 compared to the first half.
As you plan for the next phase of the COVID-19 crisis, it will be critical to review and enhance your firms’ approach to monitoring and surveillance. Even as offices begin to reopen, it’s likely that some percentage of your firm’s employees will continue working from home into 2021.
A good strategy is to treat your firm’s employees as your first line of defense. They should understand how to prevent and identify potential misconduct, as well as the role they play in protecting your firm from the reputational and financial damage. Empowering your employees with knowledge through training will help strengthen their ability to play this crucial role.
Free Web-Based Insider Trading Training Course
To help protect your firm during this challenging time, ACA is providing our web-based insider training course to individuals and up to 100 licenses to firms free of charge until September 4.
The course provides investment advisers of all sizes with an effective and comprehensive review of insider trading risks. It's designed to ensure your staff gain a broad understanding of their role in protecting your firm.
During the course, employees will learn:
- How to recognize material non-public information (MNPI)
- How to identify common sources or situations involving MNPI
- What steps you must take if you come into contact with MNPI
- Practical guidance for handling MNPI to protect your firm’s reputation and yourself personally
This course includes embedded questions throughout the modules, as well as a scored, 12-question final exam for which completion and scores are recorded for review and regulatory records.
For more best practices and insights to protect your firm from insider trading, market abuse, and other misconduct, check out the following ACA resources:
- On Demand Webcast: Protect Your Firm Against Insider Trading and Other Misconduct Related to COVID-19
- Compliance Alert: FCA Reminds Firms of Market Abuse and Reporting Requirements During the COVID-19 Crisis
- Blog Post: Code of Ethics Concerns and Best Practices in Times of Market Volatility
- Blog Post: Tips to Enhance Electronic Communications Surveillance
- Blog Post: Mitigating Employee Risks Related to the COVID-19 Pandemic
- White Paper: Best Practices for Implementing a Holistic Surveillance Program
How We Help
While education and awareness are crucial components of an effective surveillance program, so are testing, automation, and analysis. ACA recommends that firms implement an automated surveillance system that can be calibrated to your firm’s specific risks. We offer a range of trade surveillance technology and analysis solutions designed to help your firm effectively, diligently, and proactively manage its firm-wide and employee trading risk in a way that meets regulatory expectations and industry best practices.
To learn more about how we can help protect your firm against potential insider trading, market abuse, and other misconduct, reach out to your ACA consultant or contact us here.
ACA’s COVID-19 Resources
ACA is actively monitoring the developments related to COVID-19 and producing resources to help your firm address the risks and challenges created by this crisis. Visit our COVID-19 Resources page to access our resources.