In business, a Chinese wall is an information barrier implemented within a firm to separate and isolate persons who make investment decisions from persons who are privy to undisclosed material information which may influence those decisions. This is a way of avoiding conflict of interest problems.
In general, all firms are required to develop, implement, and enforce reasonable policies and procedures to safeguard insider information and to ensure that no improper trading occurs. Although specific procedures are not mandated, adopted practices must be formalized in writing and be appropriate and sufficient. Procedures should address the following areas: education of employees, containment of inside information, restriction of transactions, and trading surveillance.
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Famous quotes containing the word wall:
“What harm cause not those huge draughts or pictures which wanton youth with chalk or coals draw in each passage, wall or stairs of our great houses, whence a cruel contempt of our natural store is bred in them?”
—Michel de Montaigne (1533–1592)