Personal Account Dealing (PAD)

Employees of banks, brokers, asset managers and listed companies often see client orders or unpublished news before the market does. Personal account dealing policies stop them using that edge. Typical rules include pre-clearance, where staff ask compliance for approval before a trade and get a short window to act; minimum holding periods; bans on dealing in restricted-list names; reporting of accounts and statements; and blackout periods around results. Rules often reach to spouses and household members whose accounts the employee can influence. Compliance reviews trades against the firm's lists of inside information and client activity. Breaches range from a late report to front running, which is a serious offence. Pre-clearance records and holding-period checks give a firm evidence, if a regulator asks, that staff trades were screened against client activity.

An equity analyst at an asset manager wants to buy shares in a mid-sized company. She asks compliance for pre-clearance. The company is on the firm's restricted list because the firm is advising on a deal, so the request is refused. A week later the deal is announced, and her record shows she did not trade.