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Girlfriends new job enforcing me rules about how and what to trade

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JamesCrockett
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Girlfriends new job enforcing me rules about how and what to trade

#257888

Postby JamesCrockett » October 14th, 2019, 9:40 pm

Hi,

appologies if a thread with similair question already exists, but I didn't know what to search for.

The problem I have is that my partner recently started working for one of the investment banks and one day she came home all upset that I need to give her a list of all the broker accounts I have opened, all the shares I am owning and that she will tell me what I am and what I'm not allowed to do from now one regarding trading, since I am a connected person .

Offcourse It made me really angry, and we have constant arguments since then, because she is blaming me she will be fired because of me and my UK Vanguard account, which is one of the brokers I'm using, but it is not on her approved list.

Regarding myself, I am just a beginner in trading. I have a LISA and ISA accounts, I play arround on Crowdcube and Freetrade. I don't have any margin accounts.

According to her, I should cancel my Vanguard account, Freetrade, Crowdcube and I would need to share the activity in the rest of my accounts with her employer.

How serious are these rules? I just feel like my privacy is being invaded big time and it feels silly I can't invest into passive index funds under my conditions or invest into a startup I find on Crowdcube.

Could her employer really fire her because of my Vanguard/Freetrade accounts??

(We live and work in UK, she does not hold an executive position, and she is not involved in any trading activities. We are not married, but we have a mortgage together.)

Lootman
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Re: Girlfriends new job enforcing me rules about how and what to trade

#257896

Postby Lootman » October 14th, 2019, 10:08 pm

I was in the opposite situation for many years, i.e. I worked in the investment business and my employer wanted details of my wife's accounts.

However they certainly took a lower key approach than you are being told. Basically they just wanted copies of the trade confirmations and statements. This was to ensure that she was not acting on any inside information about the securities that we had a business relationship with.

So if my wife only invested in funds then it was a moot issue, since a fundholder has no control over the securities held within those funds. Some individual securities could not be traded. Some others could be traded but we had to submit a request first.

There would sometimes be a further restriction on securities that I personally was in an active capacity with, e.g. advising them on a merger. But that wasn't very common, given my personal role.

There was no limit on which broker she used, although some places might insist that the employee's family only has an account with the employer. And foreign accounts might be frowned upon.

I can't say that I am current with all the compliance rules these days. And different companies will have different policies. But for what it is worth I think that as long as you are willing to provide her employer with the ability to monitor your trades, and you are aware of any restricted securities, then that should be sufficient.

genou
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Re: Girlfriends new job enforcing me rules about how and what to trade

#257913

Postby genou » October 14th, 2019, 11:40 pm

JamesCrockett wrote:
How serious are these rules? I just feel like my privacy is being invaded big time and it feels silly I can't invest into passive index funds under my conditions or invest into a startup I find on Crowdcube.


They are very serious, and her employer is under their regulator's gun to make sure they comply.

JamesCrockett wrote:Could her employer really fire her because of my Vanguard/Freetrade accounts??

Yes, in the sense that they are free to do so. It will be in her terms and conditions that you ( as a connected person ) must comply with the rules. They may give her some slack, but is that a bet you want to make?

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Re: Girlfriends new job enforcing me rules about how and what to trade

#257957

Postby didds » October 15th, 2019, 8:50 am

Interesting stuff form an outsider (Im sure its a total ITA for the OP).

Purely for my own intrigue/interest - would a separated spouse that is not divorced, with no contact at all be a "connected person"? And _have_ to supply such information even though no contact exists any longer - and in extreme circumstances may not even be contactable (no known contacts etc) ?? *I ask because it is clear to me that such rules and regs, while being there for sensible reasons, often just cannot cope with fringe scenarios and Im just intrigued!

didds

dionaeamuscipula
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Re: Girlfriends new job enforcing me rules about how and what to trade

#257970

Postby dionaeamuscipula » October 15th, 2019, 9:39 am

I suspect that Lootman's experience pre-dates the Market Abuse Regulations.

The MAR rules on PCAs are noted here:

https://uk.practicallaw.thomsonreuters. ... sc.Default)&firstPage=true&bhcp=1

Interestingly, parents and siblings living at separate addresses are not included.

The OP's girlfriend has essentially no employment protection (unless there is discrimination), so the employer doesn't really need any reason to fire her, so yes, she can be fired for non-compliance with their compliance regime. And I suspect that would be the case even once employment protection kicked in.

I don't and haven't ever worked in financial services so I can't say if the regime being described is particularly severe or not, but there are plenty of people who are covered by some sort of connected persons legislation (waves to MrsDM) and they and I comply or find gainful employment elsewhere.

I am surprised that the need for compliance by a PCA came as a surprise to her. I would expect the need for compliance to be spelled out in her employment contract.

DM

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Re: Girlfriends new job enforcing me rules about how and what to trade

#257971

Postby Parky » October 15th, 2019, 9:41 am

Is a partner (girlfriend) really a "connected person" in law? What about other friends and acquaintances with whom the OP has had long friendly relationships? I'm surprised.

dspp
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Re: Girlfriends new job enforcing me rules about how and what to trade

#257974

Postby dspp » October 15th, 2019, 9:47 am

https://www.handbook.fca.org.uk/handboo ... G2418.html

https://www.handbook.fca.org.uk/handboo ... /G282.html

I may not have picked the best links, I am sure others can find better ones.

In practical terms your GF's employer has a certain amount of discretion as to how they apply the FCA rules across their particular firm. In this case it sounds like the employer is at the bottom-covering end of the spectrum. It is unrealistic for you to expect that the firm will exercise any discretion in respect of a (??) lowly new hire. They are absolutely within their rights to terminate your GF's employment within the notice period if there is non-compliance, indeed they would be remiss if they did not do so.

Your GF is being very mature and forthcoming by identifying you as her civil partner or equivalent. This indicates - to me at least - that she takes her duties as an employee very seriously, and that she takes her relationship to you similarly seriously. I am guessing that you are not in fact her civil partner (but having a mortgage together is a pretty long term commitment), and I am guessing that the employer has over-interpreted / widened their interpretation of civil partner to include girlfriends/boyfriends, but I am sure that many lawyers will have - for good reason - advised them to do just that so as to always be on the safe side.

If you want this relationship to continue then you have choices:
- your GF could move to another firm that has a slightly different interpretation of the rules;
- you could look positively at this and understand exactly what is possible within the GF's firm's interpretation of the rules;

It is all very well getting shirty about the rules (and indeed I think you would be justified as it looks to be an over-onerous interpretation to me eyes) but that is in practical terms irrelevant. She is a lowly cog in a big uncaring machine, and she is trying to do her best for you and for herself in a hardscrabble world at the start of her career. My personal opinion, if you want this relationship to continue, is to view this as a challenge to explore what you can still do whilst staying within their rules. People here on TLF can provide a great deal of guidance if you want support in particular areas.

regards, dspp

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Re: Girlfriends new job enforcing me rules about how and what to trade

#257983

Postby Charlottesquare » October 15th, 2019, 10:09 am

Had this sort of thing twice a long time ago.

First was re my CA apprenticeship in the mid 1980s, vast list of entities presented to me and I needed to confirm I had no financial interest in any of them.Then the question of my father's financial interests arose, they seemed to suggest he needed to disclose shares etc with which he had a connection. This was awkward as he thought it was none of their business and he ran an Edinburgh law firm which had a niche in trust work, they held hundreds of investments as trustees. I seem to recall he advised my employers that he was not going to oblige them with disclosures and I heard nothing more about it.

The second was when I got married in 1990, my other half was a Quant analyst and Registered Rep at County Nat West, there I did have to oblige, we did any trading (not that we did that much) via a stockbroking account with them and any purchases or sales we made had to go through compliance (which tended to delay them a day);one of the costs of getting her salary, the non contributory pension, BUPA, the subsidised mortgage (5% max interest) and the annual bonuses.

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Re: Girlfriends new job enforcing me rules about how and what to trade

#257985

Postby scrumpyjack » October 15th, 2019, 10:11 am

Your GF could suggest to her employer that they pay the costs of your moving to another broker? That is a perfectly reasonable compromise.

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258038

Postby Lootman » October 15th, 2019, 2:09 pm

Parky wrote:Is a partner (girlfriend) really a "connected person" in law? What about other friends and acquaintances with whom the OP has had long friendly relationships? I'm surprised.

I believe that the smell test is applied. So if you are just dating it should not be an issue. But if you live together then you may be deemed to be civil partners, which would be considered the equivalent of a spouse for this purpose.

Other "connected persons" could be parents, siblings and adult children, depending on where they live. Friends and acquaintances would not be but of course that doesn't mean you can pass on tips to them without possibly getting into trouble.

The other possibility is for your GF to ask for a special exemption from this kind of reporting. I've seen that happen (I worked in Compliance for a while, but long ago). But of course you need to be able to make a persuasive case. An example might be if you also worked for an investment company, and the two sets of compliance rules conflicted with each other.
Last edited by Lootman on October 15th, 2019, 2:20 pm, edited 1 time in total.

swill453
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Re: Girlfriends new job enforcing me rules about how and what to trade

#258039

Postby swill453 » October 15th, 2019, 2:19 pm

Lootman wrote:I believe that the smell test is applied. So if you are just dating it should not be an issue. But if you live together then you may be deemed to be civil partners, which would be considered the equivalent of a spouse for this purpose.

You can't be "deemed" to be civil partners. Civil partnership is a specific legally registered partnership between same-sex couples.

Are you possibly thinking of the term "common law" partners?

Scott.

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258041

Postby Chrysalis » October 15th, 2019, 2:29 pm

Presumably the issue here is not the degree of commitment of the relationship, but that they are financially connected by way of holding a mortgage together? And may have joint accounts etc. So yes they have a financial relationship.

The girlfriend isn’t trying to be awkward. If you wish to be supportive of her career, do what needs to be done, don’t make unnecessary arguments. The firm should be able to provide written details of exactly what is compliant and what isn’t.

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258044

Postby AF62 » October 15th, 2019, 2:36 pm

JamesCrockett wrote:The problem I have is that my partner recently started working for one of the investment banks and one day she came home all upset that I need to give her a list of all the broker accounts I have opened, all the shares I am owning and that she will tell me what I am and what I'm not allowed to do from now one regarding trading, since I am a connected person.


I suppose there could be many circumstances where a husband/wife (or other connected person) of an employee might not want to give their other half who is the employee the information (as they maintain separate financial lives), but understand that their employer needs to see it.

Presumably the finance companies must have processes and procedures in place to receive the information directly from the husband/wife with proper security to prevent disclosure of that information to the employee.

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258047

Postby dspp » October 15th, 2019, 2:56 pm

swill453 wrote:
Lootman wrote:I believe that the smell test is applied. So if you are just dating it should not be an issue. But if you live together then you may be deemed to be civil partners, which would be considered the equivalent of a spouse for this purpose.

You can't be "deemed" to be civil partners. Civil partnership is a specific legally registered partnership between same-sex couples.

Are you possibly thinking of the term "common law" partners?

Scott.


Scott / swill,

It was me that introduced the term 'civil partner' to the thread. I did so based on the FCA weblink I gave https://www.handbook.fca.org.uk/handboo ... G2418.html which uses the term,

"(b) the spouse or civil partner of the relevant person or any partner of that person considered by national law as equivalent to a spouse;"

If I was the employer a joint mortgage would trigger the smell test. Hence the GF being required to raise the matter, quite properly, with the original poster.

So far so good. However the list of permitted transactions & permitted platforms, or the not permitted ones, looks overly onerous. Some are clearly to rule out the platforms that are great for all manner of evasions. Others look less clearcut. But again when dealing with the junior new hire (the GF) the HR department will simply say "you sign here" and "he signs there" or "goodbye". They won't be interested in splitting the fees or getting into theoretical disputes. It is simply "if you want to work here then sign here, and him too, otherwise goodbye".

A long time ago I once had a similar issue on day 1 of my employment with a very large bluechip. I could see why they wanted me to sign what they wanted, and irrespective of the fact that I thought they were being overly restrictive I decided to sign. It is worth keeping an eye on the bigger picture, in this case presumably a long term relationship between the couple, and a start in a career for the GF.

Regards, dspp

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258063

Postby swill453 » October 15th, 2019, 4:05 pm

dspp wrote:It was me that introduced the term 'civil partner' to the thread. I did so based on the FCA weblink I gave https://www.handbook.fca.org.uk/handboo ... G2418.html which uses the term,

"(b) the spouse or civil partner of the relevant person or any partner of that person considered by national law as equivalent to a spouse;"

If I was the employer a joint mortgage would trigger the smell test. Hence the GF being required to raise the matter, quite properly, with the original poster.

I wouldn't say that the quoted term allows for a smell test. Spouse and civil partner have specific legal definitions, and the equivalent has the specific condition "considered by national law". No smelling required!

(I am of course aware that it's a quote from the FCA, and not the OP's employment contract.)

Scott.

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258094

Postby MyNameIsUrl » October 15th, 2019, 5:48 pm

Professional firms don't simply tell their new employees to go home and instruct their partners that they need to give a list of etc etc... There will be a internal document which sets it all out in detail. I understand that the OP is angry about this, but I suggest it would be useful to get hold of the document, study it, and do what it requires to the letter (and don't do anything it doesn't specifically demand). There has been a lot of useful advice on this thread but all responders are in the dark as to what the OP's girlfriend firm is actually specifying.

It may not be relevant in this case, but once when I was in a similar situation I realised the firm didn't mind what I was holding, only what I was trading, which removed almost all the work on me.

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258119

Postby hiriskpaul » October 15th, 2019, 7:23 pm

How draconian and/or idiotic an organisation's compliance procedures are can vary enormously. You do need to take them seriously though. If your partner loses her job because of a breach of rules she will find it difficult to get another job.

Some organisations will insist on you asking for permission to do a trade before you do it and will occasionally decline requests without giving you a reason. I would be very surprised if they ever prevented you from investing in mainstream funds, ITs or ETFs though.

As others have said, find out what the rules are. Your partner should have been issued with an employee manual or handbook which outlines the rules.

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258146

Postby JamesCrockett » October 15th, 2019, 11:21 pm

Thanks for all the replies!

dionaeamuscipula wrote:I am surprised that the need for compliance by a PCA came as a surprise to her. I would expect the need for compliance to be spelled out in her employment contract.

Employment contract just mentioned the condition to comply with the account dealing policies, which she got hold of later in a compliance training.

dspp wrote:Your GF is being very mature and forthcoming by identifying you as her civil partner or equivalent. This indicates - to me at least - that she takes her duties as an employee very seriously, and that she takes her relationship to you similarly seriously.

Yes, she is. All of this is true, although I don't think you can assume all of this from this situation. In this case she is just taking care of her and her career.

scrumpyjack wrote:Your GF could suggest to her employer that they pay the costs of your moving to another broker? That is a perfectly reasonable compromise.

It is reasonable, but is it done like this in practice as well? Like someone mentioned we are just tiny cogs in a big uncaring machine...

AF62 wrote:I suppose there could be many circumstances where a husband/wife (or other connected person) of an employee might not want to give their other half who is the employee the information (as they maintain separate financial lives), but understand that their employer needs to see it.

Exactly! That is what made me "angry". We keep all of our finances separately, I did not know her salary until we applied for the mortgage. We always split everything evenly 50-50. We never talk about our salaries, and we always keep everything straight to the penny! This strict separation is all her life mantra and I'm ok with it, but it can be annoying. Like she wants to pay for things separately so that she does not own me anything or the other way around...but I guess this is more of a relationship than legal issue :)

MyNameIsUrl wrote:Professional firms don't simply tell their new employees to go home and instruct their partners that they need to give a list of etc etc... There will be a internal document which sets it all out in detail. I understand that the OP is angry about this, but I suggest it would be useful to get hold of the document, study it, and do what it requires to the letter (and don't do anything it doesn't specifically demand). There has been a lot of useful advice on this thread but all responders are in the dark as to what the OP's girlfriend firm is actually specifying.

hiriskpaul wrote:As others have said, find out what the rules are. Your partner should have been issued with an employee manual or handbook which outlines the rules.

It is one of the top investment banks and yes I did get hold of the document, but imagine the irony, it says it is for internal use only. It is a more than 10 page document and a separate list of accepted brokers. My GF already had to close her Vanguard account, because it is not on the list. The other restrictions are about the holding period, margin accounts, CDF, spread betting, private investments...everything forbidden or only allowed with preclearance. But this does not bother me that much. What bothers me are the fees for moving the money between platforms, selling the actual assets, and moving from a recommended platform to one with higher fees.

A potential problem can also be a SIPP pension plan because you can do some trading there as well. I have one of those from my previous employer. And it just gives me an idea that they can't operate with a zero tolerance policy, because I couldn't change my pension plan if I was still working for them!?

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258164

Postby JohnB » October 16th, 2019, 7:02 am

The Vanguard account is relatively new (you used to need 100k to invest direct), so is probably an omission. You could ask them to add it, but as orhers have said a new lowly employee shouldn't make waves. I'd write off dealing fees for any move, but if you are likely to be hit by capital gains tax, they should pay that.

Your relationship with the GF is more important than being right.

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Re: Girlfriends new job enforcing me rules about how and what to trade

#258166

Postby Urbandreamer » October 16th, 2019, 7:27 am

JamesCrockett wrote:A potential problem can also be a SIPP pension plan because you can do some trading there as well. I have one of those from my previous employer. And it just gives me an idea that they can't operate with a zero tolerance policy, because I couldn't change my pension plan if I was still working for them!?


Calm negotiation is the way to go. For example they may be happy with you holding Vanguard funds, just not in a Vanguard account. The constraint upon brokers may be so the timeing of your trades may be monitored and flagged.

JamesCrockett wrote:.....Exactly! That is what made me "angry". We keep all of our finances separately, I did not know her salary until we applied for the mortgage. We always split everything evenly 50-50. We never talk about our salaries, and we always keep everything straight to the penny! This strict separation is all her life mantra and I'm ok with it, but it can be annoying. Like she wants to pay for things separately so that she does not own me anything or the other way around...but I guess this is more of a relationship than legal issue :)


I quite understand. My wife and I share similar opinions to those you say your partner has. Her firm also were concerned about my investments when she joined, to my similar irritation.
Over the years they have come to understand that, just as they impliment "Chineese walls", so can some of their employees.
They are now less concerned about what I invest in, as they accept that I avoid any conflict of interests, when I'm aware of them. Also that the only reason that I would trade, having learned something about a company they were involved with, is BECAUSE what I had become aware of is that they were involved and hence there might be a concern of insider trading or conflict of interest in the future.

That said, things still happen. Not long ago my wife was forced to dispose of a VCT that she had invested in because the firm had taken on responsibility for their accounts, which of course put her in a position that could lead to concerns of a conflict of interest. Not something that you want to happen less than five years after the purchase.

If I may comment upon relatioships. Decades have passed since my wife and I married. We have children and shared responsibilities. The strict seperation of finances now has fluffy edges and, while we still keep seperate finances, we regard our combined wealth as "ours". It no longer matters if I pay for a new garage roof, or she pays for a new conservitory.
For those who find the concept of seperate finances strange, how do you buy each other presents without what you spend showing in a joint account?


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