Gray List
Categories: Regulations, Banking
The gray list is a list of stocks better saved for a sunny day rather than a rainy one.
It's something that investment banks have, listing stocks they aren’t allowed to trade because of potential conflicts of interest.
When investment banks are working with certain businesses, say, in facilitating a merger or acquisition for them, those businesses’ stocks go on the gray list, or the “don’t touch (for now)” list. It’s just too risky for the investment bank, since big moves like mergers could result in stocks jumping or dropping...too much uncertainty and risk to take on.
Once all the hubbub has died down, and whatever merger or acquisition has finished, causing their stock prices to settle at a stable-ish place, those companies can be taken off of the gray list, and the investment bank can investment in that company’s stocks again.