FYI
---------------------- Forwarded by Paul Simons/LON/ECT on 11/09/99 01:26 PM 
---------------------------


Paul Simons
11/08/99 07:13 PM
To: John Sherriff/LON/ECT@ECT, Mark Frevert/LON/ECT@ECT, Danny 
McCarty/LON/ECT@ECT
cc: Michael R Brown/LON/ECT@ECT 
Subject: Restricted List

As you know, insider dealing (dealing in listed securities when in possession 
of price-sensitive information concerning those securities or their issuer) 
is a criminal offence in the UK.  This is an issue in the case of credit 
derivatives which often have listed securities (normally bonds) as their 
reference asset. 

SFA require us to have in place an effective mechanism to ensure our staff do 
not commit this offence.  We have concluded that operating a Restricted List 
procedure in London is the least onerous option - the most likely alternative 
would be to create a Chinese Wall involving the physical separation of 
traders from other staff.  

The Restricted List procedure is attached for your review and comment.  As 
you will see, it is short, simple and self-explanatory.  In essence, it 
establishes a channel through which price-sensitive information flows from 
the various business heads in to our SFA Compliance function who will 
maintain the Restriced List.  Before deals involving listed securities can be 
executed, the trader will need to check whether the issuer of the subject 
securities is on the list.  This process is manageable in the case of credit 
derivatives because the deal flow in such transactions is never enormous.

I would like to introduce this procedure next week at the latest.  The 
business unit heads who are most likely to encounter price-sensitive 
information and to whom we propose introducing this procedure are:  

Eric Gadd
Ron Bertasi
Chris Waltenspuel
Paul Chivers
Joe Gold
Louise Kitchen
Richard Lewis

Please let me know if you have any comments on this or any questions.

Paul