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Template:Regulator requests: Difference between revisions
→Obligation to notify provider of regulator requests
Amwelladmin (talk | contribs) (Created page with "====Obligation to notify provider of regulator requests==== This is a common and oft accepted provision: where you are obliged to disclose to a regulator, you must first notif...") Tags: Mobile edit Mobile web edit |
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====Obligation to notify provider of regulator requests==== | ====Obligation to notify provider of 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 | 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 representations, or try to obtain injunctive relief, to prevent disclosure. However excitable your counterparty, try to resist this. When you step through it, it is hard to see any real world cases where your [[counterparty]] could or would actually try to enjoin a regulator from [[requiring]] disclosure, and plenty of benign circumstances where disclosure is a matter of course. To wit: | ||
*'''[[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. | *'''[[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. | ||
*'''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. | *'''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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*'''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. | *'''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. | ||
And that is borne out by the [[JC]]’s tawdry personal experience (anecdotal though it may be, it does span 22 years and | And that is borne out by the [[JC]]’s tawdry personal experience (anecdotal though it may be, it does span 22 years and three different [[investment bank]]s): the [[JC]] has never ever, ever seen '' anyone'' take injunctive relief to prevent disclosure of confidential information to a regulator. | ||