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Assess materiality and public availability
CFA Institute distinguishes the significance of the information from whether it has reached the market generally. Disclosure to a small investor group does not automatically make information public. The standard also covers inducing others to trade, so avoiding a personal trade is not the only consideration.
Apply the standard to a stated case
Assume an issuer privately tells an analyst in an engagement meeting that it has lost a major contract. The prompt stipulates that the information is material, has not been released to the market and could affect the investment’s value. The analyst sends a sell instruction to a colleague because of that information. Under those stated facts, the instruction causes another person to act on material nonpublic information. Calling the meeting “stewardship” does not remove the information condition.
Avoid two shortcuts
| Shortcut | Why it fails |
|---|---|
| I did not trade personally | The instruction caused a colleague to act |
| Several investors heard it | Selective disclosure is not general market dissemination |
Keep ethical and legal analysis distinct
This exercise applies the CFA Institute standard to facts supplied in the prompt. Actual information-handling decisions also require the relevant organisation’s compliance process and applicable law. Do not infer a universal legal waiting period from this case or treat a particular number of meeting attendees as an automatic publication test.