What Is the Role of a ‘Chinese Wall’ in a CEX’s Internal Structure?

A 'Chinese Wall' is a set of internal policies and physical or digital barriers designed to prevent the flow of material non-public information (MNPI) between different departments within a financial institution, such as a CEX. Its role is to prevent conflicts of interest, specifically insider trading and front-running, by ensuring that employees with knowledge of pending large trades (e.g. from a brokerage desk) cannot pass that information to the trading desk for personal profit.