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. What types of companies hire a chartered financial analyst (CFA)?

    Find out which types of firms typically employ chartered financial analysts, what positions CFAs frequently hold and which ...
  2. What are the major categories of financial institutions and what are their primary ...

    Understand the various types of financial institutions that exist in today's economy, and learn the purpose each serves in ...
  3. What's the difference between investment banks and commercial banks?

    Understand the principal differences between investment banks and commercial banks, and the areas of banking services that ...
  4. Who facilitates buying and selling on the primary market?

    Learn more about the primary marketplace -- home of initial public offerings -- and the major players that make buying and ...
RELATED TERMS
  1. Bidding Ring

    A group of individuals or businesses that conspire to affect ...
  2. Negative Option Deals

    A dubious business practice that involves supplying a typically ...
  3. Bad Faith Insurance

    An insurance company’s appalling or malicious refusal to pay ...
  4. UDAAP

    Misleading or harmful behaviors by those who offer financial ...
  5. Computer Crime Insurance

    An insurance policy that provides protection from crimes committed ...
  6. Lloyds Organizations

    An insurance syndicate that bases its organizational structure ...

You May Also Like

Related Articles
  1. Investing

    How Counterfeiting Affects Alibaba's ...

  2. Personal Finance

    Top Spots to Wine and Dine Clients in ...

  3. Entrepreneurship

    How Microfinance and Investment Banking ...

  4. Entrepreneurship

    Should I Have An IPO on My Business

  5. Active Trading Fundamentals

    Who are Berkshire Hathaway's (BRK.A) ...

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!