4. Information Sharing

Handling Confidential Information

4.1 INFO Principle 1

Market Participants should clearly and effectively identify and appropriately limit access to Confidential Information.

4.1.1

Market Participants should identify Confidential Information. Confidential Information includes the following information received or created by a Market Participant, but which is not in the public domain:

• Trading Information. This can take various forms, including information relating to the past, present and future trading activity or positions of the Market Participant itself or of its Clients, as well as related information that is sensitive and is received or produced in the course of such activity. Examples include but are not limited to:
  • Details of a Market Participant’s order book;
  • Other Market Participants’ Axes;
  • Spread matrices provided by Market Participants to their Clients;
  • Orders for and during the Benchmark Process; and
  • Details of an individual Client’s vault holding;
• Designated Confidential Information. Market Participants may agree to a higher standard of non-disclosure with respect to confidential, proprietary and other information, which may be formalised in a written non-disclosure or a similar confidentiality agreement.

4.1.2

Identification of Confidential Information should be in line with any legal or contractual restrictions to which the Market Participant may be subject.

4.1.3

Market Participants should limit access to and protect Confidential Information, and to this end:

• Market Participants should not disclose Confidential Information except to those internal or external parties who have a valid reason for receiving such information, such as to meet risk management, legal or compliance requirements on a need to know basis;
• Market Participants should not disclose Confidential Information to any internal or external parties under any circumstances where it appears likely that such party will misuse the information;
• Confidential Information obtained from a Client, prospective Client or other third party is to be used only for the specific purpose for which it was given, except as provided above or otherwise agreed with a Client;
• Market Participants should disclose to Clients at a high level how Confidential Information is shared internally in accordance with this Principle.

INFO Principle 2

Market Participants should not disclose Confidential Information to external parties, except under specific circumstances

4.2.1

Market Participants can disclose Confidential Information only under certain circumstances. These may include, but are not limited to, disclosure:

• To Agents, market intermediaries (such as brokers or trading platforms) or other Market Participants to the extent necessary for executing, processing, clearing, novating or settling a transaction;
• With the consent of the Client, where permissible;
• To advisers or consultants on the condition that they protect the Confidential Information in the same manner as the Market Participant that is disclosing the Confidential Information; and
• Required to disclosed under Applicable Law, or as otherwise requested or required by a relevant regulatory authority, public authority, trade association or trading venue where Applicable Law allows.

4.2.2

Market Participants may actively choose to share their own prior positions and/or trading activity so long as that information does not reveal other party’s Confidential Information and the information is not shared in order to disrupt market functions or hinder the price discovery process, or in furtherance of other manipulative or collusive practices.

4.2.3

When determining whether to release Confidential Information, Market Participants should comply with Applicable Law, as well as any agreed-to restrictions that may limit the release.

Communications

INFO Principle 3

Market Participants should communicate in a manner that is clear, accurate, professional and not misleading

4.3.1

Communications should be easily understood by their intended recipient. Therefore, Market Participants should use terminology and language that is appropriate for the audience and should avoid using ambiguous terms. To support the accuracy and integrity of information, Market Participants should, where appropriate, have policies and procedures designed to:

• Attribute information derived from a third party to that third party (for example, a news service);
• Identify opinions clearly as opinions;
• Not communicate false information;
• Exercise judgement when discussing rumours that may be driving price movements, identify rumours as rumours and not spread or start rumours with the intention of moving markets or deceiving other Market Participants; and
• Not provide misleading information in order to protect Confidential Information. For example, Market Participants could, if asked, decline to disclose whether their request to transact is for the full amount, rather than inaccurately suggest that it is for the full amount.

4.3.2

Market Participants should be mindful that communications by personnel reflect on the organisation they represent as well as the industry more broadly.

INFO Principle 4

Market Participants should communicate Market Colour appropriately and without compromising Confidential Information

4.4.1

The timely dissemination of Market Colour between Market Participants can contribute to an efficient, open and transparent Precious Metals Market through the exchange of information on the general state of the market, views, and anonymised and aggregated flow information.

4.4.2

Market Participants should give clear guidance to personnel on how to appropriately share Market Colour. In particular, communications should be restricted to information that is effectively aggregated and anonymised. To this end:

• Communications should neither include specific Client names or other mechanisms for communicating a Client’s identity or trading patterns externally (for example, code names that implicitly link activity to a specific Market Participant), nor information specific to any individual Client;
• Client groups, locations and strategies should be referred to at a level of generality that does not allow Market Participants to derive the identity of other Market Participants or underlying Confidential Information;
• Communications should be restricted to sharing market views and levels of conviction, and should not disclose information about individual trading positions;
• Flows should not be disclosed by exact prices relating to a single Client or flow. Volumes should be referred to in general terms, other than publicly reported trading activity;
• Option interest, not publicly reported, should only be discussed in terms of broadly observed structures and thematic interest;
• References to the time of execution should be broad, except where this trading information is broadly observable;
• Market Participants should take care when providing information to Clients about the status of orders (including aggregated and anonymised orders) to protect the interest of other Market Participants to whom the information relates (this is particularly true when there are multiple orders at the same level or in close proximity to one another); and
• Market Participants should not solicit Confidential Information in the course of providing or receiving Market Colour.

Note: see Annex 1 for a set of illustrative examples of Market Colour communications.

INFO Principle 5

Market Participants should have clear guidance on approved modes and channels of communication

4.5.1

It is recommended that Market Participants communicate with other Market Participants via methods of communication that have the capability of providing a complete audit trail of market activity. Appropriate standards of information security should apply regardless of the specific mode of communication in use.

4.5.2

Where possible, Market Participants should maintain a list of approved modes of communication, whether working in the office or remotely, and it is recommended, even where it is not required, that communication channels on sales and trading desks be recorded.

4.5.3

Market Participants should be aware that recording electronic and audio communications can aid them in dealing with trade disputes over terms and/or (mis)conduct allegations. This Code recommends that Market Participants provide for recorded modes of communication as per 4.5.2. However, those firms that do not have a regulatory obligation to record their communications should make an active decision on whether the benefits outweigh the costs. Such considerations should be risk based, reflect the size and importance of the transactions to the firm, and the likelihood of disputes or conduct issues arising given the nature of the transactions entered into.