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| ===What’s in a [[confi]]?=== | | ===What’s in a [[confi]]?=== |
| Confis can be “one way”, where one party discloses and the other receives, or “two way”, where both parties disclose sensitive information. A broker’s template will tend to be far more generous when it is receiving only, than when it is giving information up. | | Confis can be “one way”, where one party discloses and the other receives, or “two way”, where both parties disclose sensitive information. A [[broker]]’s template will tend to be far more generous when it is receiving only, than when it is giving information up. I know this may come as a shock to some of you. |
| ====Length==== | | ====Length==== |
| Firstly, let’s be blunt about this: there is a special place in hell for [[Mediocre lawyer|any advisor]] who serves up a confidentiality agreement more than 3 pages long. Even three pages is purgatorially tedious. GET TO THE POINT. It’s a goddamn [[confi]], not the sale of your soul. Oh hang on. | | Firstly, let’s be blunt about this: there is a special place in hell for [[Mediocre lawyer|any advisor]] who serves up a confidentiality agreement more than 3 pages long. Even three pages is purgatorially tedious. GET TO THE POINT. It’s a goddamn [[confi]], not the sale of your soul. Oh hang on. |
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| {{confidential information}} | | {{confidential information}} |
| {{confi obligation}} | | {{confi obligation}} |
| ====Obligation to notify provider of regulator requests====
| | {{regulator requests}} |
| This is a common and oft accepted provision: where you are obliged to disclose to a regulator, you must first notify the provider of the information, to allow them to make
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| *'''[[Trade reporting|Trade]]/[[transaction reporting]]''': [[Broker]]s will be obliged to disclose a lot of trade-specific client information to regulators and exchanges every day on account of {{t|MiFID}}/{{t|EMIR}} [[Trade reporting|trade]] and [[trade reporting]]. We are not going to repeatedly tell the client that.
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| *'''Ad-hoc ''general'' information requests''': Outside [[Trade reporting|trade]]/[[transaction reporting]], when regulators ask for [[ad hoc]] information from a [[broker]], it is usually for a wide-ranging data set across whole trading books and sectors, covering multiple clients. It is unrealistic to accept [[Brokers]] to monitor which clients within that population have confis, much less a right to be specifically notified beforehand. Nor will they want to go to the trouble of getting all those consents. Why? BECAUSE LIFE IS TOO SHORT.
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| *'''Ad-hoc ''client-specific'' information requests''': Where a regulator specifically asks for data on a single client, it is likely the regulator will also have made equivalent disclosure requests to the client at the same time (or copied the client on those requests to the [[broker]]) — if the request is benign — and if it has not, the investigation is likely to be one where the regulator would not allow the [[broker]] to alert the client anyway, and indeed where such notification could be a criminal offence (market abuse, etc). Even where the notification clause carves out where “notification being illegal” this leaves the [[empty set]] of circumstances where the [[broker]] would have to give info about a specific client and the client doesn’t, but was entitled to know about it.
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| *'''Commercial sensitivity''': Lastly, the legitimate point of a confi is ''to respect the client’s legitimate interest in protecting the commercial value of non-public information''. It is ''not'' to keep silent about behavioural turpitude; indeed a [[broker]]’s regulatory obligations may oblige it to report, without invitation, bad acts it observes, whether the client likes it or not and whether there is a [[confidentiality agreement]] or not. Generally, client information a [[broker]] holds is not legally or professionally [[privilege]]d. Since, by definition, passing information to a regulator should not<ref>Absent a severe dereliction of the regulator’s duty, and in that case there’s not really much the broker can be expected to do about it, is there?</ref> prejudice the commercial value of that information, it is hard to see when client would have a valid reason to seek injunctive relief to prevent disclosure of information to a competent regulator.
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| And that is borne out by the [[JC]]’s tawdry personal experience (anecdotal though it may be, it does span 22 years and four different investment banks): the [[JC]] has never ever, ever seen anyone take injunctive relief to prevent disclosure of confidential information to a regulator.
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| ===='''Return of information'''==== | | ===='''Return of information'''==== |