Professionals in financial services and other regulated industries find that managing their investments is not as straightforward as opening an online account and buying assets. Personal account dealing rules, Chinese walls, and Material Risk Taker (MRT) all impact these individuals, putting restrictions on how they can access financial advice and manage their wealth.
These restrictions on personal account dealing and Chinese walls are in place to protect market integrity, prevent conflicts of interest and manage systemic risk. While the reasons for these regulations are clear, they do cause considerable inconvenience and difficulties for the individuals concerned, in particular when it comes to obtaining tailored financial advice and ensuring that it is compliant.
Why These Professionals Face Greater Scrutiny
Personal Account Dealing Rules
Employees in regulated firms, especially in financial services, often require:
- Pre-trade approval
- Post-trade reporting
- Restricted securities lists
These requirements help prevent market abuse or conflicts of interest, but they also make investment decisions slow and burdensome.
Chinese Walls
Employees with access to inside or price-sensitive information (e.g. M&A teams, analysts, or legal counsel) are subject to information barriers and prohibited from trading in securities where a conflict may arise.
Material Risk Takers (MRTs)
MRTs are individuals who, due to their role or seniority, can materially impact a firm’s risk profile. Under FCA SYSC, CRD V, or Investment Firms Prudential Regime (IFPR), MRTs may face:
- Deferral of bonuses and variable pay
- Restrictions on investment activities
- Closer scrutiny of personal account dealing
- Disclosure obligations on wealth accumulation
MRTs are often senior managers, risk-takers, or traders with influence over large transactions or risk positions, and are usually listed in a firm’s Remuneration Policy Statement (RPS).
The Wider Group Affected
Alongside these roles other professionals face similar barriers:
- Investment bankers, traders, and asset managers with FCA/SEC PAD rules
- Lawyers, accountants, and corporate advisers working on M&A or IPOs
- Executives and directors with insider knowledge of listed companies
- Research analysts and compliance staff in regulated firms
Edale’s financial advice for Material Risk Taker, Approved Person and Restricted Professionals
Individuals with enhanced regulatory obligations can get a professional on their side for their finances while remaining fully compliant. We understand the need for financial planning advice that takes account of the FCA Remuneration Code, the CRD IV/V Remuneration Package, and the IFPR. We have extensive experience in dealing with the reporting requirements for MRTs (Material Risk Takers) and other employees who may have PAD (Personal Account Dealing) restrictions in place.
Our advice services for professionals with enhanced regulatory obligations:
- Investment advice that is tailored to take account of PAD restrictions, MRT obligations, and insider dealing rules.
- Portfolio management discretion: A fully directed account can remove the need for day-to-day pre-trade approvals, and minimise the ongoing reporting burdens.
- Compliance letters and trade reporting documentation: We can supply all the necessary paperwork for internal compliance approval, including compliance letters, quarterly statements, and trade reports in the format required by internal compliance officers.
- Consideration of the FCA Remuneration Code: The remuneration structures of MRTs (deferred bonuses, stock retention requirements) are taken into account in our wealth planning to ensure it complements other restrictions being placed on personal finances.
- Pre-approved investment universes: We can use diversified portfolios funds and ETFs to gain the necessary market exposure for your portfolio without the risk of stepping outside of pre-approved investments.
- Liaison with employer compliance: We can liaise directly with internal compliance officers to ensure that your investment arrangements are pre-approved and documented.
Get in touch to find out how we can help you implement your wealth building plans while meeting all your reporting requirements.
Can Material Risk Takers invest in ISAs or pensions?
Yes, but you may need compliance approval first.
Do PAD rules apply globally?
Yes—similar restrictions exist under FCA, SEC, EU, and APAC regimes.
Will Edale help me get compliance approval?
Yes, we provide all required documentation for your employer.