Material Non-Public Information (MNPI)
Material Non-Public Information (MNPI): Information that is not available to the general public and that, if disclosed, would likely have a significant effect on the price of a security or other financial instrument.
Plain-English Explanation
MNPI refers to significant facts about a company that have not yet been released to the market. Because the broader investing public does not know these details, they cannot be factored into current stock prices. Possessing or using this information for trading decisions is strictly prohibited for insiders and professionals because it creates an unfair advantage over other investors who are relying on publicly available data.
Why It Matters
For independent analysts and serious investors, distinguishing between public research and MNPI is critical for compliance and ethical integrity. AI-assisted research tools must be configured to source data exclusively from public filings, earnings calls, and news wires to ensure outputs do not inadvertently rely on or suggest the use of MNPI. Understanding this boundary helps practitioners maintain professional standards and avoid legal risks associated with insider trading, ensuring that investment theses are built on verifiable, open-market evidence.
Next Step
Review your current research workflow to identify any data sources that may contain non-public details. Ensure your AI assistant is set to prioritize only citable, public records to support your investment decision-making process.
Examples
- A portfolio manager learns from a private meeting with a CEO that a major product launch has been delayed by six months. This knowledge is not yet in public reports. If the manager sells their holdings in that company before the news is publicly announced, they have traded on MNPI. Conversely, if the manager reads the same delay announcement in a press release published on the company’s investor relations page, they are using public information.