What is Material Non-Public Information (MNPI)?
Material Non-Public Information (MNPI) is confidential data about a company or security that has not been publicly released and would likely influence an investor’s decision to buy, sell, or hold that security. MNPI sits at the center of insider-trading rules and is tightly governed across financial services.
Managing MNPI effectively is essential for protecting market integrity, reducing misconduct risk, and meeting SEC, FINRA, and global market-abuse regulations.
MNPI is any information that is both:
- Material – meaningful enough to affect a reasonable investor’s decisions
- Non-public – not yet disclosed through official channels
If the information would move the market once released, and it isn’t public, it is considered MNPI.
Common examples of material non-public information (MNPI)
| Category | Examples of MNPI | Why it is material |
| Corporate Actions | Mergers, acquisitions, divestitures | Directly impacts stock valuation |
| Financial Health | Earnings misses, non-public forecasts | Shifts market expectations |
| Legal and Regulatory | Pending litigation, SEC investigations | Signals long-term risk or liability |
| Leadership | Unexpected CEO or CFO changes | Affects market confidence in strategy |
Why MNPI matters in financial services
Financial institutions rely on timely and accurate information to operate effectively. Mishandling MNPI can lead to:
- Insider-trading violations
- Market manipulation claims
- Regulatory enforcement actions
- Reputational damage
- Lost client trust
- Civil and criminal penalties
Regulators expect firms to maintain strict controls over how material information is accessed, shared, supervised, and recorded.
Regulatory and compliance framework
US regulatory obligations
SEC Rule 10b-5
Prohibits trading on the basis of MNPI and forms the foundation of insider-trading enforcement.
Regulation FD
Prevents selective disclosure of material information to analysts, investors, or clients.
FINRA Rules 3110 and 3120
Require supervision and testing of communications, trading activity, and policies related to MNPI handling.
Investment Advisers Act
Requires firms to maintain policies for MNPI, personal trading, restricted lists, and employee certifications.
Core compliance expectations
- Clear policies governing MNPI handling
- Information barriers (“Ethical walls”)
- Employee trading surveillance
- Watchlists and restricted lists
- Recordkeeping for all communications and approvals
- Timely escalation and incident response
- Training for employees with access to sensitive data
Global frameworks
UK/EU Market Abuse Regulation (MAR)
Defines inside information and sets requirements for disclosure controls, insider lists, and the prevention of market manipulation.
Canadian National Instrument 55-104
Establishes insider reporting obligations and restrictions on insider trading to protect market integrity.
Core compliance expectations (globally consistent)
- Protection of confidential and inside information
- Controls to prevent misuse and unlawful disclosure
- Insider lists and access management
- Monitoring of trading and communications
- Strong recordkeeping and audit trails
- Timely escalation and remediation of incidents
- Ongoing employee training to support fair and orderly markets
How MNPI is shared or exposed
Modern communication tools create new surfaces for MNPI risk:
- Email and corporate messaging
- SMS, WhatsApp, WeChat, Signal, and other mobile apps
- Collaboration tools like Teams and Slack
- Screen shares, meeting chats, and video calls
- Cloud file sharing
- Personal devices and shadow IT
- Vendor and consultant access
- Work-from-home and hybrid environments
Any uncontrolled channel increases exposure.
Common MNPI risks and challenges
- Insufficient MNPI training
- Personal devices used for business activity
- Unmonitored communications channels
- Weak access controls or information barriers
- Limited audit trails during investigations
- Vendor access without proper supervision
- Difficulty retrieving records for regulatory review
Best practices for MNPI governance
- Maintain a comprehensive insider-trading policy
- Provide clear examples of MNPI and prohibited behavior
- Enforce approved communication channels
- Implement information barriers and access controls
- Use automated supervision to detect MNPI exposure
- Maintain watchlists and restricted trading lists
- Require pre-clearance for employee trading
- Conduct recurring training and attestations
- Maintain audit-ready records
Strong MNPI governance strengthens market integrity — and reduces the risk of costly enforcement actions.
Compliance checklist: Are you managing MNPI properly?
☐ Do we have clear policies defining MNPI and how to handle it?
☐ Are employees restricted from using unmonitored communication channels?
☐ Are information barriers and access controls implemented and documented?
☐ Do we maintain watchlists and restricted lists?
☐ Are employee trading activities monitored and pre-cleared?
☐ Can we detect and review possible MNPI exposure in communications?
☐ Can we quickly produce records for investigations or regulatory exams?
How Smarsh supports MNPI compliance
Smarsh provides the surveillance and archiving infrastructure needed to prevent and detect the misuse of sensitive information.
- Multi-Channel Capture: Securely record MNPI-sensitive conversations on WhatsApp, Teams, and SMS
- AI-Enabled Surveillance: Use lexicon-based alerts to identify potential "tips" or leaks in real-time
- Information Barriers: Enforce "ethical walls" by controlling access to archived data between departments
- Immutable Audit Trails: Maintain WORM-compliant records for all communications to prove compliance during SEC exams