Trading Policy Template

Which variant fits your situation?

Common mistakes to avoid

The 9 key sections, explained

How to fill it out

1. 1

   Define covered persons and entities

   List every category of individual bound by the policy — employees, officers, directors, contractors, and their immediate household members. Include controlled entities such as family trusts or LLCs through which a covered person might trade.

   💡 Review your cap table, board roster, and contractor agreements to identify anyone with regular access to MNPI before finalizing the covered persons list.

2. 2

   Enumerate all covered instruments

   List every instrument class the policy governs — equity, options, convertibles, ETFs with material concentration in company stock, and any other derivative referencing the company or its major clients.

   💡 When in doubt, err toward inclusion. A covered person can always ask for a specific exemption; an instrument not listed is automatically outside the policy's reach.

3. 3

   Set blackout period dates and triggers

   Enter the standard quarterly blackout start and end dates based on your fiscal calendar. Then define the event-driven trigger list — M&A, regulatory filings, material contract signings — that empowers the compliance officer to impose ad hoc blackouts.

   💡 Build the quarterly blackout calendar for the full year and distribute it to all covered persons at the start of January — eliminating 'I didn't know' defenses.

4. 4

   Establish the pre-clearance process

   Name the designated compliance contact, specify the submission format (email or form), set the lead time (2 business days is standard), and state how long an approval remains valid before it lapses.

   💡 Keep approval validity short — 5 business days is the market standard. Longer windows allow trades to proceed after new MNPI has emerged.

5. 5

   Set position limits and holding periods

   Enter the maximum portfolio concentration limit for company securities and the minimum holding period for open-market purchases. Include specific rules for shares acquired through equity compensation plans.

   💡 Tie holding periods to your standard equity vesting schedule so the two policies are consistent and covered persons receive a single coherent message.

6. 6

   Define reporting cadence and submission format

   Set the quarterly holdings report deadline, specify the transaction confirmation window (5 business days post-trade is standard), and name the repository — compliance inbox, HR system, or compliance platform — where records are filed.

   💡 Request direct broker-feed confirmations or custody statements in addition to self-reporting. The additional data layer materially strengthens your audit trail.

7. 7

   Specify sanctions and the escalation path

   List the disciplinary ladder from verbal warning through termination, and name the body — general counsel, audit committee, or board — to which confirmed violations are escalated. Include the regulatory referral obligation for suspected market abuse.

   💡 Have legal counsel confirm the applicable regulatory referral obligation for your jurisdiction before finalizing this section — the obligation varies by country and instrument type.

8. 8

   Obtain acknowledgments and store signed copies

   Distribute the policy to all covered persons and collect a signed acknowledgment confirming they have read, understood, and agree to comply. Re-collect acknowledgments annually and whenever the policy is materially amended.

   💡 Track acknowledgment completion rates in your HR or compliance system. An unsigned policy provides weak protection — a regulator will ask for evidence of distribution and receipt.

Frequently asked questions

How this compares to alternatives

Industry-specific considerations

Template vs pro — what fits your needs?

Glossary

Material Non-Public Information (MNPI)

Any information about a company that is not available to the general public and that a reasonable investor would consider significant enough to influence a buy or sell decision.

Blackout Period

A defined window of time — typically around earnings announcements or major corporate events — during which covered persons are prohibited from trading company securities.

Pre-Clearance

A mandatory approval process requiring an employee to obtain written permission from a designated compliance contact before executing a personal trade.

Covered Person

Any individual subject to the policy — typically employees, officers, directors, and their immediate household members or controlled entities.

Position Limit

The maximum size of a single holding or aggregate exposure in a given instrument or asset class that a covered person or trading desk is permitted to hold.

Short Sale

The sale of a security the seller does not currently own, with the intention of buying it back at a lower price — often restricted or prohibited under trading policies.

Derivative Instrument

A financial contract whose value is derived from an underlying asset such as a stock, index, commodity, or currency — including options, futures, and swaps.

Holding Period

A minimum duration for which a position must be held before it can be sold, designed to prevent short-term speculative trading by insiders.

Chinese Wall (Information Barrier)

A procedural and physical separation between departments with access to MNPI and those conducting trading activity, preventing the flow of sensitive information.

Suspicious Transaction Report (STR)

A mandatory regulatory filing submitted when a firm or individual has reasonable grounds to suspect a transaction may involve market abuse or money laundering.