What is material non-public information and how should it be handled?

• A. Info that could influence an investment decision and is not public; must be kept confidential and not used for personal gain or shared.
• B. Public information that isn't important and can be ignored.
• C. Information about a client that should be shared with others.
• D. Rumors about the market.

Answer: (A)

Material non-public information is information that could influence an investment decision and is not publicly available. Because it can move markets, it must be kept confidential and used only for official business purposes. If you possess MNPI, you should not trade on it and should not share it with anyone who might trade on it (no tipping). Follow your firm’s insider-trading policies, which often include restrictions and disclosure requirements, until the information is officially released and becomes public. Only then can it be used in trading.

Public information or rumors aren’t MNPI, and information about clients belongs to privacy and confidentiality rules rather than insider trading rules.