The Investment Dealers Association of Canada has published a set of guidelines for firms to help them contain confidential information and prevent illegal insider trading.

IDA notice MR0377, published Friday, says the guidelines were compiled from reviews of IDA firms that have well-developed and effective systems for containing confidential information. The guidelines spell out the use of policies and procedures that are commonly used to monitor and/or restrict transactions such as the use of “grey” (or “watch”) and “restricted” lists, and firewalls.

The IDA says that these guidelines are being provided to assist dealers that are implementing, revising or reviewing the effectiveness of their procedures. These procedures will vary from firm to firm depending on factors such as the nature of the firm’s business, its size, clientele and the markets in which it conducts business, it notes.

“Confidential Information is an issue for all dealers, not just those engaging in corporate finance or investment banking activities,” it notes. “Members that do not engage in corporate finance or investment banking should identify the possible means by which they or their personnel may come into possession of confidential information that could be used for insider trading, such as through trading by issuers, research or relationships between personnel and corporate insiders.”

“Procedures should be established for bringing the receipt of such information to the attention of management and dealing with it appropriately, using such of the guidelines as are applicable,” it adds.