Rules on material nonpublic information, insider trading, and internal information barriers.
This section separates ordinary confidentiality from material nonpublic information controls. Series 6 candidates sometimes blur those ideas together. The exam wants you to know that customer privacy, firm confidentiality, and insider trading restrictions are related but not identical. The legal and ethical response depends on what kind of information is being handled.
Questions here often hinge on whether the information is both material and nonpublic, whether someone is improperly trading or tipping based on it, and whether the representative should stop, escalate, or restrict activity. The safest exam mindset is to treat questionable information use as a control issue first.
| Information issue | What to ask |
|---|---|
| Customer confidentiality | Is this customer information that should not be shared freely? |
| MNPI | Would a reasonable investor care about this information, and is it still nonpublic? |
| Tipping or misuse | Is someone sharing or acting on information that should not be used for trading? |
| Escalation | Does this require immediate compliance or supervisory involvement? |
The key distinction is simple: not every confidential fact is insider-trading material, but every possible MNPI question should trigger a much stricter response.