How to distinguish Material from nonpublic information?

Members and Candidates who possess material nonpublic information that could affect the value of an investment must not act or cause others to act on the information. （不能使用，也不能促使他人使用重大非公开信息）

Information is “material” if its disclosure would likely have an impact on a security price or if reasonable investors would want to know the information before making an investment decision.

Material or not? => reliable source or not.

Information is “nonpublic” until it has been disseminated or is available to the marketplace in general.

May use conclusions from the analysis of material public and nonmaterial nonpublic information even if those conclusions would have been material inside information had they been communicated directly to the analyst by a company. （用非重大非公开信息推出的结论可以用，即使该结论是保密的）

A perceptive analyst reaches a conclusion about a corporate action or event through an analysis of public information and items of nonmaterial nonpublic information.  => No Violation.

Save and document all the research when applying mosaic theory.

选择性的信息公开，仍然是material nonpublic信息.

明显分析师的报告和观点未公开前也被认为是material nonpublic信息.

Companies should consider issuing press releases prior to analyst meetings and conference calls and scripting those meetings and calls to decrease the chance that further information will be disclosed.

If material nonpublic information is disclosed for the first time in an analyst meeting or call, the company should promptly issue a press release or otherwise make the information publicly available.（公司有事赶紧说）

Recommended procedures for Compliance

Firewall: Establish a reporting system in which authorized people review and approve communications between departments.

Record maintenance: 部门间的沟通应书面化，敏感部门的员工应特别关注。

Proprietary trading procedures (自营业务)：

Monitor and restrict proprietary trading when holding material nonpublic information (MNI).

Market maker in possession of MNI, if stopping trading signals to market, remain passive to market, and take only the contra side of unsolicited customer’s trades. （只被动交易）

Risk-arbitrage trading: Best to stop; If not stop, prove the adequacy of their internal procedures, demonstrate stronger review and documentation （套利交易最好停止）