📖 Standard III(B) — 综合练习与案例

Module: Ethics & Professional Standards Standard: Standard II(A) — Material Nonpublic Information (MNPI) Sub-module: 1.3 Standard II — Integrity of Capital Markets (L017-L028) Prerequisites: L017 (MNPI Concepts), L018 (Insider Information + Mosaic Theory), L019 (Selective Disclosure + Expert Networks)

I. Key Concept Review

1.1 Standard II(A) — Original Text

Members and candidates who possess material nonpublic information that could affect the value of an investment must not act or cause others to act on the information.

1.2 Four-Element Judgment Framework

1.3 Mosaic Theory — The Legitimate Path

1.4 Selective Disclosure — Core Principles

• Prohibited: Selectively disclosing material information to a select few before public disclosure
• Permitted: Disclosure to regulators or compliance departments (those with a right to know)
• Compliance Practice: When selective disclosure is discovered, urge the company to immediately make a public disclosure

1.5 Expert Network Usage Rules

II. Comprehensive Cases

Case 1: Mosaic Theory Boundary Judgment

Background: Zhang Ming is a technology sector analyst at ABC Investment. He is researching the publicly listed company XYZ Tech.

He conducted the following research: 1. Read XYZ Tech's annual reports, quarterly reports, and investor presentation materials (publicly released) 2. Analyzed public reports from industry data agencies and found that XYZ Tech's sector Q3 demand grew 15% YoY 3. Saw on LinkedIn that three of XYZ Tech's Sales VPs had all left and joined competitors within the past month 4. During lunch with a former XYZ Tech mid-level manager, the manager said, "Things are pretty chaotic internally right now, lots of people are looking for opportunities," but refused to provide specific financial data 5. Combining the above information, Zhang Ming concluded that XYZ Tech may be facing operational difficulties and downgraded his rating to "Sell"

Question: Does Zhang Ming's conduct violate Standard II(A)?

Analysis:

Conclusion: No violation. Zhang Ming's analysis process is a classic example of Mosaic Theory — piecing together investment insights from multiple pieces of public and non-material information without relying on any MNPI.

Case 2: Accidental Acquisition of MNPI

Background: Wang Fang is a portfolio manager at a large mutual fund. On a Saturday afternoon while running on a treadmill at the gym, two people on the adjacent treadmills are talking loudly:

"Did you hear? Our company is going to announce an acquisition next week, expected premium around 40%." "Really? Which company?" "MedTech Corp. The letter of intent has already been signed, formal announcement on Monday."

On Monday morning before the market opens, Wang Fang sells the shares of MedTech's competitor held in her personal account (she believes the acquisition news will lead to industry consolidation, potentially pressuring competitors' stock prices).

Question: Does Wang Fang's conduct violate Standard II(A)?

Analysis:

Conclusion: Violation. Even if the information was obtained accidentally, even if not trading the target company's stock, making investment decisions based on MNPI violates II(A). She should immediately report the matter to the compliance department and refrain from any related trading.

Case 3: Selective Disclosure and Compliance Response

Background: Li Qiang is the chief strategy analyst at a securities firm. A listed company CFO invited him to dinner alone, during which he disclosed:

"Our Q2 results will exceed market consensus expectations by at least 20% because a large order had its revenue recognition accelerated. But this is not yet public information — don't write a report just yet."

The CFO also said:

"We'll officially release the earnings preview next week; you can write your report then."

Li Qiang returns to his office, unsure how to handle the situation.

Question (Multiple Choice): Which of the following actions is/are correct?

A. Since the CFO said it will be public next week, write an internal report now for personal reference B. Immediately inform all clients so they can prepare C. Urge the CFO to immediately make a public disclosure to all investors, or release through the company's official channels D. If the company refuses immediate public disclosure, notify the company's compliance department and consult regulators E. Do nothing and wait for next week's announcement before taking action F. Only tell immediate family members so they can buy the company's stock in advance

Analysis:

• A: Incorrect. An internal report is still "using" MNPI, violating II(A)
• B: Incorrect. This is classic selective disclosure — disseminating MNPI to clients is a serious violation
• C: Correct. Upon discovering selective disclosure, urge the company to immediately make a public disclosure
• D: Correct. When the company refuses disclosure, report to compliance and consult regulators if necessary
• E: Incorrect. Doing nothing does not exempt one from responsibility — once informed, there is a duty to push for public disclosure or self-isolate
• F: Incorrect. Telling anyone constitutes tipping, a serious violation

Correct Answers: C and D

Best Practices: 1. Discover MNPI selectively disclosed → Urge the information source to publicly disclose immediately 2. If the source refuses disclosure → Report to compliance + consult regulators if necessary 3. Isolate yourself: no trading, no dissemination, no recommendations 4. Document the entire process

Case 4: Compliant Use of Expert Networks

Background: Chen Gang is a consumer sector analyst at a hedge fund, responsible for researching the listed retail company RetailMax. He arranged an expert interview through a compliance-approved expert network.

Scenario A: Compliant Questions Chen Gang asks: - "What is the overall trend in retail industry inventory levels?" - "What changes have occurred in consumer shopping behavior this year?" - "What are your views on next year's industry growth prospects?"

Scenario B: Non-compliant Questions Chen Gang asks: - "What are RetailMax's same-store sales figures for this quarter?" - "How far along are RetailMax's negotiations to acquire a competitor?" - "What new business is RetailMax going to announce next month?"

Question: Distinguish which questions in Scenario A and Scenario B violate II(A)?

Analysis:

Key Principles for Compliant Expert Network Use: 1. Must be approved by the compliance department 2. Prohibited from asking any company-specific, nonpublic information 3. Discussions should be limited to industry and macro levels 4. All communications should be documented and archived 5. If an expert voluntarily provides MNPI, immediately terminate the conversation and report

Case 5: Comprehensive Judgment — Cross-Standard Intersection

Background: Zhao Lei is an M&A department employee at an investment bank, currently working on the project of Client A acquiring Client B. He knows the details of the acquisition (MNPI). On Tuesday evening, during a dinner with friends:

1. A friend asks: "Any good stocks to buy lately?" Zhao Lei says: "I've been researching new energy lately, you might look into it." (Zhao Lei is indeed also researching the new energy sector, independent of the M&A project)

2. Another friend asks: "Aren't you working on Company A's acquisition of Company B? Is it almost done?" Zhao Lei says: "I can't discuss that, and you shouldn't ask." (Protected the MNPI, did not disclose)

3. Zhao Lei's personal account holds some new energy ETF; on Thursday, he added to the position.

4. On Friday, his wife asks: "I want to adjust our family's index fund regular investment plan, any suggestions?" Zhao Lei says: "Decide for yourself; I won't participate in your investment decisions." (Zhao Lei knows about the M&A project and does not want to influence his family's decisions)

Question: Analyze Zhao Lei's four actions. Which violate II(A)? Which violate other Standards?

Analysis:

Key Lessons: In practice, MNPI often intersects with other Standards. Even though some of Zhao Lei's actions were compliant, the safest approach is to: - Place personal accounts under firm monitoring - Obtain pre-approval for all personal trades from compliance - Exercise prudent management of all investment-related words and actions while in possession of MNPI

III. Practice Questions

Question 1 (Single Choice)

Analyst Xiao Liu, while researching listed company ABC, overhears two people in the front seat of a taxi (one is an ABC executive) saying: "This quarterly report is going to be brilliant, net profit will at least double." Xiao Liu immediately calls his trader to recommend buying ABC stock.

Does Xiao Liu violate Standard II(A)?

A. No violation — the information was overheard accidentally, so no duty of confidentiality applies B. No violation — it was an open conversation in a taxi, so it does not constitute nonpublic information C. Violation — the information is material and nonpublic; regardless of how it was obtained, it may not be used D. Violation — but only Standard I(D) is involved, no II(A) issue exists

Question 2 (Single Choice)

Which of the following most accurately describes the legitimate scope of Mosaic Theory?

A. Combining nonpublic information disclosed by insiders with other public information for analysis B. Collecting public information and non-material nonpublic information, forming investment conclusions through analysis C. Obtaining undisclosed operating data of a target company through paid expert networks D. Obtaining information from various channels, including nonpublic information from anonymous whistleblowers

Question 3 (Single Choice)

During a small-scale listed company roadshow, an analyst hears the CEO disclose a significant product recall that has not yet been made public. The analyst's best course of action is to:

A. Immediately write a report and send it to all clients B. Do nothing and wait for the company's official announcement C. Urge the company to immediately make a public disclosure; if the company refuses, report to the compliance department D. Only inform the firm's internal investment committee

Question 4 (Single Choice)

Regarding whether information constitutes "material," which of the following statements is correct?

A. Only information that clearly causes stock price fluctuations of 10% or more is material B. Any information that could affect a rational investor's decision may be material C. Qualitative information (such as management changes) will not be deemed material D. There is a clear numerical standard for judging materiality of information

Question 5 (Single Choice)

Regarding Selective Disclosure, which of the following is correct?

A. Before the company's formal announcement, CFA charterholders may inform their most important clients in advance B. Disclosing earnings data to analysts in advance is a common industry practice and does not constitute a violation C. When selective disclosure occurs, the analyst should immediately urge the information source to make a public disclosure D. Selective disclosure only involves violations by the issuer and is irrelevant to analysts

IV. Answers and Explanations

Question 1 — Answer: C

Explanation: The core of Standard II(A) judgment is the nature of the information (material + nonpublic), not the method of acquisition. Whether deliberately sought, accidentally overheard, or passively obtained, once in possession of MNPI, one must not trade or cause others to trade based on that information.

• A is incorrect: Accidental acquisition does not exempt one from II(A) obligations
• B is incorrect: Private conversation ≠ public disclosure, even if occurring in a public place
• D is incorrect: The core issue is II(A), not I(D)

Question 2 — Answer: B

Explanation: The legitimate boundary of Mosaic Theory is clear — all information sources must be public information or non-material nonpublic information. The analyst's skill lies in piecing together scattered information into valuable conclusions.

• A is incorrect: Nonpublic information disclosed by insiders may not be used, even when mixed with other public information
• C is incorrect: Paying for undisclosed operating data of a target company is precisely the type of conduct requiring vigilance
• D is incorrect: Nonpublic information from anonymous whistleblowers may not be used

Question 3 — Answer: C

Explanation: When an analyst (passively) obtains MNPI, one cannot remain silent ("do nothing" is insufficient to discharge responsibility). One must proactively push the information source to make a public disclosure. If the company refuses, escalate to the compliance department/regulators.

• A is incorrect: Disseminating MNPI to clients = selective disclosure, the most serious violation
• B is incorrect: Inaction does not exempt one from responsibility
• D is incorrect: Telling anyone (including internal personnel) constitutes dissemination of MNPI

Question 4 — Answer: B

Explanation: The standard for materiality is "whether a rational investor would consider the information important in making an investment decision." This is a qualitative, not quantitative, judgment.

• A is incorrect: There is no fixed percentage threshold
• C is incorrect: Qualitative information (e.g., CEO departure) may equally be material
• D is incorrect: No uniform numerical standard exists

Question 5 — Answer: C

Explanation: The analyst's responsibility in a selective disclosure scenario: Discover → Urge public disclosure → If refused, report → No trading / no dissemination.

• A is incorrect: Selectively disclosing MNPI to clients is a serious violation
• B is incorrect: Industry practice does not change the nature of the violation
• D is incorrect: Analysts have independent obligations and cannot absolve themselves by arguing "it's the issuer's problem"

V. Lesson Summary