The associations said the new recommendations, which have been viewed by the Fed, New York Fed and SEC, are intended to help ensure that information obtained by banks in the ordinary course of their lending or other relationships with a company is not inappropriately shared with, or used by, other business units or employees. The exposure draft is designed to offer companies guidance on how to segregate credit information into ‘private’ and ‘public’ areas. Those engaged in the former are typically involved in loan origination and advisory and could have access to non-public information. Those engaged in the public side are typically involved in securities sales and trading, and should not have access to non-public information.
“The efforts of the associations provide an opportunity for credit market participants to exchange ideas on important business and legal issues. The participants, which bring different industry perspectives, have focused on promoting responsible, efficient markets through the development of these principles and recommendations,” said Isda chief executive Robert Pickel.
The associations expect to release a final version of the document by the end of June, after reviewing comments from the industry due by June 16. The bodies will show the draft paper to the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation in the coming weeks.