Define: Unpublished Price Sensitive Information (UPSI)

What Unpublished Price Sensitive Information (UPSI) Means in a Contract

Unpublished Price Sensitive Information (UPSI) is a defined term used in contracts to capture information that has not yet been made public and that would, if released, be reasonably likely to affect the price of a company's listed securities. Contracts that reference UPSI typically do so to impose obligations of confidentiality, restrictions on trading, and controls on how the information is handled internally and externally. The term appears most often in employment agreements, non-disclosure agreements, board and committee charters, and codes of conduct for companies whose shares or debt instruments are publicly traded.

When a contract defines UPSI, it is drawing a line between ordinary business information and information that carries heightened legal risk because of its potential to move a security's price. This distinction matters because parties who possess UPSI are usually barred from trading in the relevant securities, from tipping others, and from disclosing the information except through approved channels. The contractual definition therefore acts as the trigger for a wider set of duties that extend well beyond simple secrecy.

How Unpublished Price Sensitive Information (UPSI) Is Defined or Measured

Most contractual definitions of UPSI combine two elements: the information must be undisclosed to the public, and its disclosure must be likely to materially affect the price of a security. Materiality is usually assessed by reference to whether a reasonable investor would consider the information important in deciding whether to buy, sell, or hold the security. Contracts rarely attempt to list every category exhaustively, but they often give illustrative examples such as unpublished financial results, mergers or acquisitions under negotiation, changes in key management, dividend decisions, or significant litigation outcomes.

Because materiality can be subjective, well-drafted clauses build in a process for determining whether information qualifies as UPSI, often by referring decisions to a designated compliance officer or committee. This avoids disputes later about whether a particular fact was genuinely price sensitive at the time it was shared.

• Financial results not yet released to the market
• Undisclosed mergers, acquisitions, or disposals
• Changes in capital structure or credit rating
• Significant regulatory or litigation developments

Where Unpublished Price Sensitive Information (UPSI) Appears in Agreements

UPSI clauses are common in employment contracts and consultancy agreements for individuals who may gain access to sensitive corporate data, particularly in the finance sector where price sensitivity is closely tied to regulatory obligations. They also appear in non-disclosure agreements used during due diligence, in insider trading policies, and in codes of conduct that apply to directors, senior officers, and contractors.

Beyond employment and NDA contexts, UPSI provisions surface in engagement letters with advisors, underwriters, and auditors who are given privileged access to unpublished financial data. Technology vendors handling sensitive corporate systems, discussed further in resources like an Information Security Policy, may also be bound by UPSI restrictions if their work exposes them to price sensitive data.

Related documentation, such as a Statement of Information Form, can help formalize what has or has not been disclosed, supporting a clear audit trail for compliance purposes.

Why the Exact Wording Matters

The precise wording of a UPSI clause determines the scope of liability for everyone who signs the contract. A definition drawn too broadly can capture routine business information and create unnecessary trading restrictions, while a definition drawn too narrowly may fail to cover genuinely sensitive material, exposing the company to regulatory risk under the law governing the contract.

Ambiguity in the trigger for disclosure, the timing of when information becomes public, or the list of persons bound by the obligation can lead to disputes about whether a breach occurred. Clear wording also assists in enforcement, since regulators and courts will look closely at whether the contractual definition aligns with recognized market abuse standards.

Drafting Considerations

Drafters should ensure the UPSI definition is aligned with any relevant securities regulation applicable to the contracting parties, and that the clause specifies who decides whether information qualifies as UPSI. It is also important to address the duration of restrictions, since obligations typically continue until the information is properly published, not merely until an internal deadline passes.

Practical drafting should include clear procedures for restricted trading windows, pre-clearance requirements, and reporting obligations if UPSI is inadvertently disclosed. Cross-referencing related policies, such as those managed by Compliance teams, helps ensure consistency across the organization's broader governance framework.

Finally, contracts should specify consequences for breach, including disciplinary action, termination rights, and cooperation with any regulatory investigation, to ensure the UPSI clause has real practical force rather than existing as a purely symbolic statement.