Material Non-Public Information Acknowledgement
Material Non-Public Information Acknowledgement
Interactions arranged through Office Hours occur on a secure platform specifically designed to safeguard our clients and advisors such as you whom they engage. The purpose of this agreement is to provide you with additional information concerning the important topic of “Material Non-Public Information”.
This acknowledgement form is supplemental to and incorporated into the Terms of Service Agreement which you agreed to when first signing up as an Advisor on the Office Hours Platform, including but not limited to the Indemnity Provisions in said Terms of Service. If you have any questions or comments about anything regarding compliance, please email us at email@example.com. Please note: Nothing in the below or any conversations you may have with Office Hours about the below constitutes legal advice or should be relied on by you in any way. If you are uncertain about your rights, obligations and duties in connection with your participation in any Interaction, you should obtain your own independent legal advice.
Material Non-public Information (“MNPI”) can be defined as information which:
- relates to a specific publicly-traded security (debt or equity); and
- a reasonable investor would likely consider important in making an investment decision.
What is material information
“Material information” generally is defined as information for which there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions, or information that is reasonably certain to have a substantial effect on the price of a company’s securities. Information that should be considered material includes, but is not limited to:
- dividend changes
- earnings estimates (or results)
- changes in previously released earnings estimates
- significant merger or acquisition proposals or agreements
- major litigation or regulatory inquiries
- liquidation problems
- extraordinary management developments
- current financial performance
- news of a significant sale of assets or the disposition of a subsidiary
- significant current product developments
- changes in dividend policies or the declaration of a stock split or the offering of additional securities
- significant new products, processes or discoveries
- the gain or loss of a substantial customer or supplier, pricing changes or discount policies
- major contract awards
- significant write-offs or restatements
- notice of issuance of patents.
What is non-public information
Information is non-public until it has been effectively communicated to the marketplace. One must be able to point to some fact to show that the information is generally public. For example, information found in a report filed with the SEC, or appearing in Dow Jones, Reuters Economic Services, the Wall Street Journal or other publications of general circulation would be considered public. Common examples of non-public information include information provided to a select group of analysts that is not made available to the investment community at large, information about a company that has not been disseminated by such company in a press release, information received as a “tip” from a person who owes a duty of trust or confidentiality with respect to such information.
How to treat MNPI
Being in possession of MNPI is not, of itself, illegal. However, in most jurisdictions it is a crime (usually known as ‘Insider Trading’) to trade securities about which you know MNPI. It may also be a crime to disclose (i.e. ‘tip’) MNPI to a third party. As well as criminal penalties, Insider Trading or tipping MNPI may result in civil or regulatory sanctions for both tippers and ‘tippees’.
Consequences of disclosure
If our Client were to receive MNPI from you, they would not be able to trade any securities to which such information relates – even where they had had a pre-existing intention to do so and were simply speaking with you to confirm an existing investment thesis. They may also have to place the relevant securities on a restricted list meaning that other people in their team/firm may also not be able to trade in them.
Your disclosure of MNPI about any security (even if not the subject of the Interaction) may cause significant disruption and damage to our Client, not to mention criminal/civil liability for you. You should therefore not under any circumstances disclose any Material Nonpublic Information to our Client.
By agreeing to the below agreement, you acknowledge not to provide clients with any MNPI regarding publicly listed companies, including from any companies or organizations that you have currently or have had previous affiliations.