|

Analyst conference call- material nonpublic information?

1.Is significant information about earnings guidance given out during analyst conference calls material “non-public” information.

If that is so, then aren’t CFA charterholders going to be at a distinct disadvantage in the marketplace, since all the other analysts are likely to trade based on the information they receive on the call, but the CFA charterholders can’t because of their Code of Ethics?

And, if it is considered material non-public information, why do the regulators allow it?

"Wiley's prep material was a huge part of my success." - Lindsey G., USA

CFA Charterholders (and candidates) can only act on that information once the call has ended :)

If material non-public information is given in a conference call (by accident or not), then that info becomes material public information. Sorry for the company. CFA Institute members and candidates can act on that info as soon as the call had ended, not before.

Hope this helps.

Las almas de todos los hombres son inmortales, pero las almas de los justos son inmortales y divinas.
Sócrates

Conference calls to analysts only is certainly not a public disclosure by the company (until at least the call record or the minutes from the call are published on the company website), and CFA charterholders and candidates are certainly not allowed to trade on that information. To answer the original question, no, CFA charterholders and candidates are not at a disadvantage, as insider trading is a criminal offense, so all other analysts on the conference calls are also forbidden to trade on that information.

Not sure where it’s come out that these calls are somehow private. The vast majority of these calls can be listened to live as they happen making them very public information. Recordings/call logs are later uploaded online but these aren’t the first time this information is available. I don’t think I’ve ever heard of one of these calls being private to the public.

Even if the information was non-public, CFA charterholders wouldn’t be at a disadvantage because the anyone who heard the information wouldn’t be able to legally trade on it either. Even though the information is usually public and CFA charterholders aren’t at a disadvantage most sell-side analysts are forbidden from trading stocks they cover in general.