Restricted List

This article outlines what a restricted list, why securities are placed on them, and what parts of the investment bank they effect.

What is a restricted list?

A restricted list is a list of securities which employees are prohibited from buying or selling either themselves or via any other person.

When are stocks placed on a restricted list?

Stocks of an issuer are placed on the Restricted List when either:

  • A material transaction in which the bank is involved in has been generally disclosed and the bank is in possession of or may obtain material, non-public information concerning the securities issuer; or
  • The bank is engaged in a distribution of the issuer’s securities.

What does it mean for securities that are placed on a restricted list?

When a securities issuer is subject to trading restrictions on the Restricted List, unless the Chairman of the bank otherwise approves (in consultation with Legal and Compliance) and subject to certain exceptions, the bank will not trade as principal in securities of the issuer or publish any equity research reports concerning the issuer.

In addition, bank employees cannot personally trade in securities of any issuer subject to trading restrictions on the Restricted List.

Generally, securities will stay on the Restricted List until the securities issuer announces that the material transaction has been completed or has been aborted or until Compliance is otherwise satisfied that the bank does not possess and will not come into possession of material non-public information about the securities issuer.

Trading securities on a restricted list could result in serious legal and financial repercussions.

Additional information

Check out our resources section to learn more about corporate finance.

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