Just got out of a mandatory meeting with our compliance department. The meeting was surprisingly long and very mundane. This clearly shows why I do not have a personal stock trading account. You see, our company is very stringent with the way their employee handles their own investment accounts. Every quarter, we have to disclose information about our assets.
This is industry policy when working for an investment firm. We are under strict provision from the SEC which is a group that regulates the stock market and prevent corporate abuses relating to the offering and sale of securities and corporate reporting. Our compliance group is the middleman between us and the SEC making sure everything is handled and reported diligently.
Every investment company have this requirement whether they are extremely strict having to know every detail information or rather lenient having to know only minor info. In my case, you can tell it's the former. Failure to comply to such reporting can result in termination of my employment and serious monetary fines.
Here are some key points, but the list goes beyond this repertoire. Therefore, this is a reason why I do not have a brokerage account with securities other than a 401K. I just feel this isn't worth my time for now atleast to go through this checklist of reporting every 3 months.
6 comments:
I've heard that they are pretty stringent about those rules, but I didn't know about the 2nd one! That's ridiculous. Well, BF is going to work for one of the big banks this summer and he currently is a self-proclaimed day trader. I'll be raining on that parade with this post!
Investing Newbie - The second one is ridiculous indeed. How can you time a profit by holding an asset longer than 90 days. Good luck to your BF. If he's a day trader, he might need to limit his trading to a certain number of trades a year as well. Is this a summer intern job or full time? If it's a summer internship then I'm not sure if the full time employee rule applies to him. I use to trade avidly but since all these regulations were enforced, my account is now closed.
The firm's that I worked for had some restrictions on trading based on the type of clients that the firm had. The SEC rules on employees is beyond ridiculous but that's a risk with working in the industry.
SeeJaneGetRich - Interesting that your firm is based on client type and not security type. I can see why since you work in the law field and have many different types of client base.
When I worked in finance I had those restrictions as well. Firms take insider trading very seriously (as they should). There were "black lists" of companies that are absolutely prohibited (i.e. clients you're working on) and also "gray lists" of companies where special approval had to be obtained before any trading can take place.
I hate those compliance meeting! We are quizzed on it too. Talk about a pain...
I'm a techie, but I work for a financial firm...
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