Question

With respect to the standard on material nonpublic information, information is considered material if it:

has been produced in either printed or electronic form

concerns the issue of any publicly traded security

would be likely to affect the price of a security if disclosed

Answer 1

With respect to the standard on material non public information. The information is called material if it can be used to monetise upon and causes a change in the share price or bond price. It does not matter if it is in printed or electronic form and can affect the price of security if disclosed.

For example- you work for JP Morgan as an analyst and you find out that the board is deciding upon declaration of quarterly dividend higher than previous year. The information has not been released theough any press releases yet or any other media. Such information is non public and material. If you call your broker to buy all a milliom shares in the market based on this information and that influences the share price, you have violated the standard.

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