Chinese wall

(redirected from Chinese wall (financial))
Also found in: Dictionary, Thesaurus, Legal, Wikipedia.

Chinese wall

Communication barrier between financiers at a firm (investment bankers) and traders. This barrier is erected to prevent the sharing of inside information that bankers are likely to have.

Chinese Wall

Informal; the imposed lack of communication between the investment banking and brokerage services of a financial institution. The Chinese wall exists in order to prevent brokers and investment bankers working for the same company from deliberately or accidentally sharing inside information that could lead to illegal insider trading. The Chinese wall protects both the financial institution at large and the individual investment bankers and brokers.

Chinese wall

An imaginary separation placed between a brokerage firm's investment banking business and its trading and retail business. A Chinese wall prevents investment bankers who frequently are privy to information that could substantially influence the price of a client's securities from leaking that information to the firm's traders and sales personnel. The exchange of such information is legally prohibited.

chinese wall

the segregation of the related activities of a financial institution in order to protect the interests of its clients. For example, a stock market firm could be responsible for ‘making a market’ in a particular share (see MARKET MAKER), 'while at the same time offering investment advice to clients to purchase this share, bringing with it the danger that the advice given will not be impartial.

Chinese wall

the segregation of the stockbroking, jobbing (see MARKET MAKER), fund management, etc., activities of a financial institution in order to protect the interest of its clients. For example, the same institution could be responsible for making a market in a particular financial security while at the same time offering investment advice to clients to purchase this security with the danger that the advice given will not be impartial. See CITY CODE.