Insider list management software is a digital solution that helps companies create and maintain insider lists. These lists group together insiders, those with access to inside (non-public) information on a particular subject that would significantly alter the price of a financial instrument when disclosed to the markets.
Insider list management helps prevent market abuse and is mandated by many jurisdictions, such as the European Union where insider lists are required under the Market Abuse Regulation. By monitoring insiders and highlighting their obligations regarding the use of inside information, the intention is to prevent market abuse such as insider dealing.
Such software creates a digital record that helps companies and regulators understand who was privy to the inside information and when.
Features and capabilities of insider list management software
Insider list management software typically provides the following functionality:
- Insider list template: The software provides a template for companies to fill in the personal details of insiders required by the local legislation, as well as the time at which they became aware of the information. It also ensures companies use the correct formatting for dates, times and other data. For example, the Market Abuse Regulation requires all timestamps to be entered using the UTC format.
- Insider list storage: The software stores lists for each piece of information, allowing easy access for referencing, updating or investigating.
- Automated notifications: The software notifies insiders of their inclusion on the list and their next steps. It prompts them to fill in their personal details, as well as their obligations not to unlawfully distribute the information or use it to inform trades. It keeps sending reminders until the insider takes action.
- Closed period notifications: PDMRs (Persons Discharging Managerial Responsibilities) receive automated notifications at the start of a closed period to help them avoid non-compliant personal trades.
- Email templates: The software will provide templates for emails sent to insiders, ensuring that they contain the requisite information about actions they need to take to remain compliant. These templates are editable so that organisations can tailor them to their needs.
- User and client management: The software holds all the company’s event-based lists in one tool, but issuers can add users to groups. This means that they only have access to those lists that directly affect the individual. For advisors managing multiple client lists, they can also segment the lists to ensure only relevant insiders can view the lists that relate to them.
- Versioning: Insider list management software keeps track of the changes to the insider list, saving a new version each time there is an update. This is required for compliance with MAR as it aids investigations. It can help auditors confirm that the organisation has taken all necessary steps to document insiders.
Benefits of insider list management software
Some of the benefits of using insider list management software include:
- Regulatory compliance: By creating compliant lists in the correct format and with the right record-keeping protocols, you meet the requirements of legislation regarding market abuse in your jurisdiction.
- Efficiency: Rather than assigning an employee to follow up with insiders manually to have them confirm their inclusion in the list, the software automates the process.
- Data security: An online platform with multi-factor authentication keeps the sensitive information contained in a secure place, preventing unauthorised access.
- Audit trail: The software logs whenever the company makes a change to its insider list, showing the process that it went through to keep the list up-to-date and providing proof that the company acted in the correct manner.
Using insider list software is the optimal way to ensure your lists are compliant and kept up to date. It also automates the process of reminding insiders to enter their details into the list.