Personal Account Trading Restrictions at MBB

10x Leveraged's picture
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Wondering if any current or ex-MBB consultants could shed light on what personal account trading restrictions are like at MBB (in the US). Am particularly curious as to how personal account trading policies at MBB differ from that at BB IBDs

I was wondering about the following:

1.) Pre-clearance - Do all trades need to get pre-cleared with compliance? Are indices / ETFs non-restricted or do these need to get pre-cleared as well? Are you allowed to use any brokerage or is there a specific list of brokerages you need to use in order to trade?

2.) Ease of Pre-Clearance- Generally how stringent is the pre-clearance process? Does it need to get signed off by a Partner / Senior Manager in your team or just via compliance?

3.) Types of trades - are you allowed to short stock or trade options? Or are you only allowed to go long only / no options trades permitted? Is there a minimum hold period for each trade?

4.) Blacklist - I'm guessing there compliance will have an internal list of clients that employees are prohibited from trading in (due ongoing mandates for example) - how extensive is this blacklist of securities? Would MBB pretty much have every blue chip on the blacklist (and hence employees prohibited from trading)? Like at a high level, how easily can employees trade popular blue chips such as MSFT, AAPL, AMZN etc?

5.) Firm Sentiment on personal trading - generally in your experience did your colleagues actively trade stock / options or was this viewed as taboo? Do most of your colleagues / senior level people actively manage their money, or just keep it in a diversified ETF and forget about them (like most do in IBD)?

Thanks in advance

Comments (6)

Most Helpful
Jun 4, 2020

1.) You can trade equities like ETFs and index funds without needing clearance, but individual stocks need clearing. I'm not aware of any brokerage restrictions

2.) You do not need Partner clearance, you have an internal portal where you enter a specific company name

3.) Not sure, I don't think there's anything against things like holding periods, you just need to make sure you get clearance to both buy and sell

4.) No comment lol.

5.) Haven't really asked too many people, but I'm fairly sure most people stick to index funds because no one has the time to spend studying different investment vehicles

    • 2
Jun 4, 2020

Thanks for the insights!

Jun 4, 2020

Would be awesome if anyone can comment on the minimum hold period, any restrictions in terms of which brokerage you can use, and whether shorting / options are allowed

I've heard from 3rd-hand sources that Bain is generally quite lenient whereas McKinsey is extremely stringent (pretty much forbidden from trading individual stocks so ETFs only) - would be great if someone can shed light on this

Jun 5, 2020

There is a online database of publicly traded clients of which you are not allowed to trade securities. If you already own stocks of Amazon, for example, you have three options -

  • Divest your position before the end of a grace period (usually 5-7 days)
  • Hold your position and wait until that company is removed from the list (you are not allowed to trade in the meantime)
  • Leave the firm

ETFs and other managed funds are generally allowed. Of course all of this is assuming that you do not have knowledge of "material non-public information"

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Jun 5, 2020

Great thanks - do you know by any chance if there is a minimum hold period for any ETF / individual stock trade, and whether the trading of options is permitted?

Jun 6, 2020