A:

An analyst who lends his or her expertise to an underwriting department is said to have been "brought over the wall". In financial firms, the separation between the investment analyst and the underwriting departments is described as the "wall", as in the Great Wall of China. The division exists as an ethical boundary to guard against the exchange of insider information between the two departments.

Bringing an employee from the research department of an investment bank "over the wall" is common practice. The research analyst lends his or her knowledgeable opinion about the company so that the underwriters are better informed during the underwriting process. After the process has been completed, the research analyst is restricted from sharing any information about his or her time "over the wall" until the information has been made public - another measure toward preventing the exchange of insider information.

(For more on this topic, read The Chinese Wall Protects Against Conflicts of Interest.)

This question was answered by Bob Schneider.

RELATED FAQS
  1. Do underwriters make guarantees to sell an entire IPO issue?

    Underwriters represent the group of representatives from an investment bank whose main responsibility is to complete the ... Read Answer >>
  2. What are examples of risks for all underwriter types?

    Learn about the risks faced by different types of underwriting activity. Explore specific examples of risks faced by insurance ... Read Answer >>
  3. How do I become an underwriter?

    Learn about the education, training and certification required to become an insurance underwriter as well as the important ... Read Answer >>
  4. What does the underwriter do in a new stock offering?

    Learn the role an underwriter plays for an initial public offering, and the steps an underwriter takes in preparing for an ... Read Answer >>
  5. What is real estate underwriting?

    See how underwriters for major lenders scrutinize real estate loans and manage their risk, and learn the origin of the term ... Read Answer >>
Related Articles
  1. Small Business

    How Effective Is The Chinese Wall?

    Because underwriters work on one side of the Chinese wall and analysts work on the other side, information gathered by the underwriters is not supposed to be shared with analysts.
  2. Small Business

    Uncovering The Securities Firm

    Learn about the various departments of a securities firm and the professionals who make it work.
  3. Investing

    The Road To Creating An IPO

    Through an Initial Public Offering, or IPO, a company raises capital by issuing shares of stock, or equity in a public market. Generally, this refers to when a company issues stock for the first ...
  4. Insurance

    What is a Greenshoe Option?

    A greenshoe option is a provision in an underwriting agreement that allows the underwriter to buy up to 15% of the shares in an IPO at the offer price.
  5. Insurance

    What Does an Underwriter Do?

    In the investment world, an underwriter is a company that helps corporations or other issuing bodies distribute their securities.
  6. Investing

    What You Need To Know About Financial Analysts

    Thinking about relying on analyst recommendations for your next trade? We'll show you what to watch out for.
  7. Trading

    Greenshoe Options: An IPO's Best Friend

    Find out how companies can save or boost their public offering price with these options.
  8. Insights

    Presidential Candidates And Wall Street In 2016

    Wall Street's influence will play a large role in the 2016 presidential race. As election season begins, candidates are showing their true colors.
  9. Personal Finance

    Careers: Equity Research Vs. Investment Banking

    Equity research is sometimes viewed as the unglamorous, lower-paid cousin to investment banking. In this article, we compare the two careers.
  10. Insights

    Energy Fuels Announces $10M Bought Deal Offering (UUUU)

    Energy Fuels will use the proceeds to fund various projects, including shaft sinking and evaluation at its high-grade Canyon mine project in Arizona.
RELATED TERMS
  1. Brought Over The Wall

    A situation where an employee in the research department of an ...
  2. Underwriting Fees

    Underwriting fees are monies collected by underwriters for performing ...
  3. Underwriter

    An underwriter is a company or other entity that administers ...
  4. Underwriting Agreement

    A contract between a group of investment bankers who form an ...
  5. Transferable Underwriting Facility - TRUF

    A type of underwriting facility that deals in Euro notes. Transferable ...
  6. Negotiated Underwriting

    A process in which both the purchase price and the offering price ...
Hot Definitions
  1. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  2. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  3. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  4. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
  5. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly AIMR) that measures the competence and integrity of financial ...
  6. Initial Coin Offering (ICO)

    An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture.
Trading Center