To feel confused regarding trade rules whilst working for a bank

[Longjohn33]

I work for a bank in a back office role paying circa £20,000 a year full time. It’s entry level and I started in January after a break caring for my children. I started working from home and have been getting on with my job and enjoying it. It’s a processing/admin type job.

I don’t have access to any insider knowledge, trades etc. My partner has always worked and has accumulated some stocks and shares over time. He’s very interested in stocks, I’m not but wanted to have a try and have about £10k in some stocks.

When I started I got an email from compliance asking for any stock accounts me or partner has. I gave them the details but wasn’t overly concerned as it said it was relating to market abuse, insider knowledge etc. I knew that wasn’t anything I would be involved in within my job. There was a list of things that did need to be declared and things that didn’t but I wasn’t sure what half of them meant.

My manager never mentioned anything about it - it was just an email in my inbox. Fast forward to now I wanted to swap my stocks into my shares ISA. I done this then a few days later I got an email asking for an explanation of why I had done this etc.

I explained I didn’t realise and would seek approval before doing anything else in my account. I’m not heard the outcome of this yet and whether I am in serious trouble.

Over the weekend my partner announced he wanted to buy stocks in a company. I went onto my emails over the weekend and asked for approval.

All I got back was DENIED.

I asked for an explanation but I’m still waiting.

I’m getting very concerned and wonder if I’m being unreasonable. My partner is not happy that he cannot buy these and is saying he has nothing to do with me financially and we are separate completely, not financially linked nor married so doesn’t understand. Also my job is basically me sitting at a desk processing admin tasks so I don’t know either. My manager is on holiday for 2 weeks so I have no one to ask except compliance who are not replying yet.

Any advice.

Inside traders have specific training regarding what they can/can't say or do around share trading because they're privy to potentially market changing information e.g. profit/loss announcements beforehand.

I'd be surprised if you're privy to that sort of information that senior people are very careful to guard in the role you describe. The restrictions imposed on you seem disproportionate.

It could be purely because of the level of investment you have in shares - you might have accidentally fallen into one of the control categories. If that was the case though, full training needs to be provided so you understand why there are restrictions and how they are applied fairly to you.

I'd email compliance again asking for specific policy documents or training that outlines why a junior sorry but effectively you are member of staff is being made subject to strict insider trading controls.

I used to work in a similar function and there was no restriction on buying stocks and shares. The only thing I can think of is if he wants to buy something that may cause reputational risk to the bank. Even then, I would think compliance could only advise against it and not legally prohibit it.

I would have a good read of the organisation's policies to understand the issue better. Ask compliance for a copy of needed.

yabu
I work in a different field with strong anti corruption rules.
dh, dc and I are not allowed to own individual stock shares for that reason. even though I don't have any insider knowledge through my work.
we can invest in managed fonds though.

however, our staff handbook is very clear on what is and isn't allowed.

Thanks, I didn’t want to push and make myself look silly if it was obvious why these rules applied to me but I’m glad you seem to agree. He wanted to put £3,000 into a share which is not risky, stable and not an obscure company to invest in. It’s a long term investment he wanted too so not some quick buy sell to make money.

Do you live together? You are financially linked if you do.

You may not realise it but regardless, you may well have access to information that would enable you to trade at an advantage. It's pretty standard to have limitations on trading if you have access to any information which isn't publicly available, I spend about half the year unable to trade the shares in the company I work for this reason.

You need to carefully read all the compliance paperwork. If you don't understand it or how it applies to you, you need to ask and made sure you are clear on anything you need to do to comply.

If your partner is very into share dealing, a role in finance/banking may not be suitable for you if its limiting for him.

I think YAB a little U. This is part of working in a bank and is very standard.
You live together and so in some respects are financially linked, even just in paying rent/bills. It has also been very common for someone working in a bank to pass on insider information to a partner/relative/friend to trade on their behalf and share the illegal gains.
As a result financial institutions have to have strict rules and monitoring, and these are required by government regulations. A very common one is that all shares accounts must be held with the bank themselves or an approved affiliate so they can monitor any unusual activity. When a regulator suspects insider trading they can and will ask for any employee trades on the name.

Just by virtue of being in the building you could accidentally be privvy to information or strike up a relationship with someone who has that info. They need to monitor all employees for that reason.

There may be a list of companies that are on a permanent no trade list due to the relationship the company has with them, therefore if you work there you can never trade it. It is just part of the employment conditions. I know colleagues that inherited or had shares prior to joining and basically couldn't sell unless they left the firm.

Single stocks are usually the biggest issue. Often mutual funds/index trackers where you don't make the decision about what names go in have some sort of exemption on pre approval. I stick to these to make my life easier.
When I have been uncertain I have emailed compliance to confirm if it needed a disclosure, they have always been helpful. It is better to ask the questions and appear silly than risk being fired for being in breach of policy.

I'd add you need to reread the policy and make sure you understand it. Ask compliance/colleagues/boss for clarification if needed and don't execute any trades or account changes till you do.

As well as all accounts being monitored and stock pre approval, there may be rules on holding periods (e.g. no trading in and out of a position within a short period of time), approved trades much be executed within a set amount of time or the approval expires, and blackout periods at certain times. Not realising isn't an excuse.

Honestly if you enjoy your job I don't think it's worth sacrificing it and the financial benefits it brings so your DH can trade some stocks. Research shows most people fare no better picking shares than a random # generator.

Lots of jobs have rules around outside activities to avoid conflicts of interest, this is the key one in finance.

I have always worked in financial services and as a senior accountant I have been responsible for financial reporting (amongst other things). At times depending on my role at the time, I have been subject to insider trading rules which as you can imagine are extremely strict. At other times, I have been subject to a more generic type of restriction that applies broadly across the workforce, it sounds like you are subject to this. I personally chose to never hold shares in my organisation, I think I was given some one year but I didn’t touch them whilst I was still employed there.

Your boyfriend is being a bit naive, of course family members including partners would be expected to abide to the same restrictions, otherwise the insider could just ask their spouse to transact on their knowledge!

This is standard policy for many banks. As PP have mentioned it’s difficult to draw the line on what is insider trading, and you are probably unwittingly exposed to knowledge via your admin tasks, for example you have a admin task and then overhear a conversation in the office or a news article that shows the bigger picture behind your processing task... put two and two together to get some insider info.
I work in financial services with a similar policy to yours, DH works for a different firm and their policy is no trading at all including partners etc.

Unfortunately this is pretty normal in financial services, and you are financially linked to your partner if you work together. Different firms apply restrictions to a greater or lesser degree so you need to read your own policies to know specifically what is allowed. I generally don’t invest in anything complex as I can’t be bothered with all the forms!

Work = live, sorry

Do you live together?

YABU. There should be a copy of notifiable investments readily available to all staff. I'm in a not-dissimilar industry and although I don't personally have anything to do with the clients involved there are quite a large number of funds I can't invest in.