Confidentiality (Max rating: Minimum Compliance)

Background

Confidential (non-public) information falls into 3 categories:

  • Proprietary information – this may have competitive or commercial value.
  • Inside information – concerning finances, operations and strategy.
  • Sensitive information – in respect of post or future proceedings or deliberations.

Unauthorised disclosure of confidential information may:

  • Impact or imperil a fund’s competitive advantage or commercial success.
  • Lead to illegal insider trading/manipulation of stock/units pricing.


Policy/fund documentation

  • Confidentiality policies applicable to the fund should clearly set out/explain obligations owed by managers and investors in respect of provision, receipt and communication of confidential information.
  • There is a tension between a need to maintain confidentiality, and a need for transparency. Managers are encouraged to be as transparent as reasonably practicable, and where necessary to supply information via confidentiality agreement.