Dear Peeps, In general, what kind of companies have the fewest restrictions on personal investment accounts, day traders, and swing traders? Not expecting that an employee could march in and set up an 8-monitor trading station with a dedicated fiber line and FIX connection to the exchange in their cube ("Yeah Boss, I'll have that status report to you in a jiffy!"). However, if a profitable opportunity arises, it would be nice to be able to swing with a move without causing trouble; a trade through a simple laptop wifi connection. I realize that FINRA has a list of companies that they monitor (link follows). These are obviously out, but it's not that simple: 1. Some firms are surprisingly not on the list. For example, the Bank of America.. but they merged with Merrill Lynch. They are a massive bank; would other laws apply? Would an employee of BOA then be subject to FINRA regulation due to the merge with Merrill? 2. Some companies are not on the FINRA list, but other policies seem to apply. For example, someone who works for Merck is restricted in pharma stocks. 3. Some companies will even require an employee to close accounts that encourage day-trading. They really want their employees using ONLY the investment vehicles provided by the internal HR department; usually investing for more than one year in a 401k and/or IRA. They give the employee a dozen crappy mutual funds to choose from, pretty much to earn a hefty profit for the executives who shook hands with the company's "preferred vendor" of financial services. No "unapproved investments," including individual equities, options, or short positions. 4. Some companies also have internal policies against day trading, like "all trades must go through the compliance department" with a "24-hour minimum turnaround for approval" (Read this as one week). During the interview process, a blunt question like, "Do you have any policy against day or swing trading?" might not be well received. What's the appropriate way to find out company policy, and restrictions for a specific company? 5. Do any companies basically have a "Don't ask, don't tell" policy? Just do your thing, but keep quiet about it. 6. Should one be terrified to talk with the compliance department about this? 7. Does a different business arrangement (W2, corp-to-corp, or 1099) help to avoid these restrictions and policies? Thank you for your help. FINRA list: https://www.finra.org/about/firms-we-regulate
Based on my experience on both the buy side and the sell side: 1- Probably depends on where they are working. Someone working as a bank teller for BoA with no exposure to price sensitive information is probably fine. Someone in a senior position close to, or in, an investment banking role will be in a controlled function. 2- the merck restriction seems sensible to me for obvious reasons 3 - Obviously it depends on the firm but there are some common themes. For example here is a summary of the rules in my last job: - no futures options or other derivatives (I worked for a futures hedge fund, so too close to home) - all trades to be cleared in advance and reported afterwards. - copies of all tickets to be sent from brokers - no trades in positions on a black list. This list was related to equities we were trading in a sub fund - no selling short (bad publicity) - minimum holding period of one month (if you're day trading, are you really focusing on your job?) - trades in the firms own stock required special approval and had a minimum holding period of one year. Employees who were aware of price sensitive information (of which I was one) couldn't trade during the 'black out' period around company results For 4 - I think it would be fine to say politiely "I do a lot of personal trading. Could I please have a copy of your policy on this?" in an interview. For 5 - unlikely. Complicance and regulation are so heavy nowadays. Now it might be that a dodgy shop has an unwritten policy of don't ask don't tell, but that certainly wouldn't be written down. What would be written down is a formal policy which your manager tells you can safely ignore. Of course if you get caught they will deny all knowledge and you'll be fired. For 6 - you shouldn't be terrified, you absolutely have to speak to compliance to find out what the rules are. They're more likely to be nice to you if you've reached out, rather than tried to hide what you're doing or put your head in the sand. 7 - Absolutely not. That would be viewed very badly by regulators and I doubt a compliance department would let it go eithier. GAT
employers/regulators can't find out this information unless you voluntarily disclose it if you're not doing anything illegal like insider trading, spoofing, etc, nobody will bother looking into it
You've clearly never had a job in the industry. When you sign your employment contract one of the clauses will say you have to follow the firms personal dealing rules. At a minimum these will require all trades to be disclosed to the firm. If you don't do and you get caught you'll be fired. You may also face regulatory sanction (so you never want to work in finance again?) Sorry to be so brusque but this is such dangerous advice I couldn't let it stand. GAT
@kmiklas, are you enquiring about financial firms, or just general? I think only financial firms are regulated in that way... because they might have front running info.. Which I think is overestimated, most hedgefunds and market makers and propfirms have no insider/frontrunning knowledge. When our firm (MM) got bigger, all employees needed to sign agreements regarding personal trading... but we were still allowed to trade actively, although we needed to provide weekly or monthly statements to the firm.
wrong are you really that worried about losing your job that you would let the government scare you into giving up your freedom of privacy? that's unfortunate
You're right. If your personal right to privacy is more important than not breaking the law, if it's so vital that you don't mind going to jail or paying a massive fine, if it trumps your job security and your future income and wealth, if it's more important than the legal and regulatory system that's there to stop people insider trading: then yes. By all means do whatever the hell you want. Just be aware of the consequences that's all. GAT
Money, job security, threats of consequences...that's all a form of control. Who is in control of you? Your employer and the government? I thought this was the land of the free. Seems like the land of the slaves to me.
I don't live in the 'land of the free' (I assume you mean the US). Not that any of this is going to help the OP. GAT