A&O tightens the rules on staff share dealing

Allen & Overy

has moved to avert potential conflicts arising
from employees buying and selling shares.

The firm is to issue new rules on share dealing, telling all its staff that they must seek approval from A&O before buying or selling securities.

Until now, only partners were forbidden from purchasing shares in clients

Linklaters has had a similar rule in place for the past 20 years, and Herbert Smith for eight years. Clifford Chance and Freshfields also both follow the same guidelines.

It is understood that A&O’s partnership secretariat is nearing the end of a review on the regulation of share dealing within the firm.

The Law Society does not have any guidelines on solicitors dealing in securities. This is a matter on which the magic circle firms regulate themselves, such is the high level of price-sensitive information any City lawyer dealing with public companies or their advisers can possess.

A&O’s current policy states that all members of the firm should not buy securities in any way that will attract scrutiny or criticism, but this is the first time that it has set hard-and-fast regulations on the subject.

“The guidelines were a bit woolly before so they’re being tightened up,” an A&O source told The Lawyer.

All the magic circle firms have a blanket ban on share dealing in companies that are clients.

Linklaters has a further system where the finance director must personally approve any other share dealing, while at Freshfields, anyone wanting to buy shares must first get approval from the conflicts department.