In Board Notice 500, SFA have reminded firms of their existing
obligations when undertaking programme trading, which is a series
of transactions effected by an institution when it acquires or
disposes of an entire portfolio, a material part of a portfolio, or
a basket of at least 20 stocks, whether or not trading as principal
SFA has explained that, under Principle 6, which
governs conflicts of interest, firms are prevented from dealing
ahead of the designated strike time for a programme trade unless,
exceptionally, it has obtained informed consent from its customer.
In addition, the 'best execution' rules apply to each individual
transaction executed in a programme trade unless best execution has
been waived by the customer, or the terms of the transaction
involve there being a 'guaranteed' trade.
This guidance follows an investigation by SFA into
programme trading carried out in 1996 by SBC Warburg on behalf of
Kleinwort European Privatisation Investment Trust.