Ethics
Material nonpublic information
Ask two separate questions: would a reasonable investor care, and is the information available to the market? A trusted source does not make private information public.
Worked example
A private warning of a major earnings miss can change an investment decision. Telling a colleague to sell before the announcement also creates a problem.
Common exam mistake
The mosaic theory permits conclusions from public information and nonmaterial nonpublic information. It does not excuse use of material nonpublic facts.
Syllabus connection: Guidance for Standards I–VII. 2026 official topic outline.
Practise this topic