Unpublished price-sensitive information
|Equity Derivatives Anatomy™|
Unpublished price-sensitive information, (“UPSI” or, jovially “oopsie”, also known by some as material non-public information with the less playful initialism MNPI) is what we used in the good old days to call inside information. The sort of thing that, if you trade on it, you might expect to do a stretch for insider trading (now known, less glamorously, as market abuse).
Not to be confused with confidential information which may. on occasion, happen to also be UPSI, but for the most part is not. It’s just just secret, proprietary, valuable or embarrassing, and often embarrassing only because you made such a fuss about it, and it's not really very secret, proprietary or valuable.
Equity swaps and ~
A perennial thorn in the side of those who negotiate ISDA equity derivative master confirmations. The disclaimers and representations each side requires of the other — that it has no UPSI when trading equity swaps — ought to be about as uncontroversial as can be. It is jailable behaviour. Who goes near that?
So, when you find your client — especially if it is a spin-off of, or alumni from, SAC Capital, Galleon, Front Point or the Tiger Asia Fund — wanting to parse the minutiae of just how much knowledge of MNPI they profess the the best of their belief not to have when they trade — be very very, very sceptical. It happens a lot more than it should, which is never.