16.4 Separation of Corporate Finance Activities

16.4.1

A Trading Member's corporate finance activities must be separate from its dealing, research and back office operations. Separation means at least having the following:—

(1) separate reporting lines in place between the corporate finance activities and the other activities;

(2) restriction of communication and information flow between the corporate finance activities and the other activities to avoid leakage of sensitive information;

(3) adequate procedures to avoid any conflict of interest that may arise from the corporate finance activities and the other activities; and

(4) access into the corporate finance department be restricted only to the corporate finance staff and any other authorised staff of the Trading Member.

16.4.2

A Trading Member may have a research analyst assist in a corporate finance project. If so, the Trading Member must have procedures to avoid any conflict of interest.

Other departments of the Trading member may provide accounting, personnel support and other support services to the corporate finance department but the Trading Member must ensure that confidentiality of corporate finance customers is preserved.