Brokers and Investment Advisers Standards of Conduct: Suitability vs. Fiduciary Duty

2010 ◽  
Author(s):  
Melanie L. Fein
Keyword(s):  
Fiduciary Duty ◽  
Standards Of Conduct ◽  
Investment Advisers

Fiduciary Principles in Investment Advice

2019 ◽  
pp. 144-165
Author(s):  
Arthur B. Laby
Keyword(s):  
Fiduciary Duty ◽  
Duty Of Care ◽  
Complex Nature ◽  
State Law ◽  
Fiduciary Duties ◽  
Legal Obligations ◽  
Standards Of Conduct ◽  
Investment Advisers ◽  
Definition Of ◽  
Investment Advice

This chapter examines the fiduciary principles governing investment advice. Fiduciary principles in investment advice are both straightforward and complex. They are straightforward because most investment advisers are considered fiduciaries and subject to strict fiduciary duties under federal and state law. Their complex nature arises from the fact that many individuals and firms provide investment advice but are not deemed investment advisers and, therefore, are not subject to a fiduciary obligation. This chapter first explains whether and when an advisory relationship gives rise to fiduciary duties by focusing on both federal and state law, as well as the individuals and firms that typically provide investment advice. In particular, it looks at certain persons and entities excluded from the definition of investment adviser and thus not subject to the Investment Advisers Act of 1940, namely broker-dealers, banks, and family offices as well as accountants, lawyers, teachers, and engineers. The chapter also considers fiduciaries under ERISA, the Investment Company Act, and the Commodity Exchange Act before discussing the fiduciary duty of loyalty and how it is expressed and applied in investment advisory relationships; the fiduciary duty of care and how it differs from other standards of conduct, such as a duty of suitability; and other legal obligations imposed on investment advisers and how those obligations relate to an adviser’s fiduciary duty. Finally, the mandatory or default terms with regard to an investment adviser’s fiduciary duties are explored, along with remedies available for breach of fiduciary duty.

5 The Regulatory Duties Arising from the Provision of Investment Advisory and Management Services

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Financial Services ◽  
Public Investment ◽  
Private Investment ◽  
The United States ◽  
Fiduciary Duty ◽  
Regulatory Regime ◽  
Investment Funds ◽  
Investment Advisers ◽  
The Uk ◽  
Management Services

This chapter examines the regulatory duties of investment managers arising from the provision of investment advisory and management services. Managers of private investment funds that are authorised or regulated as investment advisers or managers can owe regulatory duties arising under the Financial Services and Markets Act 2000 (FSMA) in the UK and the Investment Advisers Act of 1940 in the United States. The chapter begins with a discussion of the UK Financial Conduct Authority’s (FCA) regulation of the conduct of firms authorised under the FSMA, including collective investment schemes, public investment funds, and fiduciary duty in the financial services regulatory regime. It then considers the FCA’s regulatory response to private investment funds as well as the U.S. Securities and Exchange Commission’s compliance programme for investment advisers and managers primarily under the Advisers Act. It concludes with an analysis of financial services regulation of fiduciary duties.

SEC approves new municipal advisor fiduciary duty rule

2016 ◽  
Vol 17 (2) ◽  
pp. 43-49
Author(s):  
Stephen Wink ◽  
Anna Rienhardt ◽  
Brett M. Ackerman ◽  
Sean Miller
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Fiduciary Duty ◽  
Wall Street ◽  
Content Type ◽  
Final Version ◽  
Consumer Protection Act ◽  
Standards Of Conduct ◽  
Practical Guidance ◽  
Significant Milestone

Purpose To analyze the Municipal Securities Rulemaking Board’s new rule outlining the standards of conduct and fiduciary duties applicable to municipal advisors. Design/methodology/approach This article contains a summary of new MSRB Rule G-42 and identifies key areas where the final version of MSRB Rule G-42 differs from the initial proposal. Findings New MSRB Rule G-42 represents another significant milestone in the MSRB’s development of a comprehensive regulatory framework for municipal advisors mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act and imposes significant requirements on municipal advisors. Originality/value Practical guidance from experienced securities and financial services lawyers.

Decoding the SEC rulemaking package on standards of conduct for investment professionals

2018 ◽  
Vol 19 (4) ◽  
pp. 6-12
Author(s):  
Mark M. Attar ◽  
Marguerite Bateman ◽  
Jack P. Drogin ◽  
Domenick Pugliese ◽  
Rachael Leah Schwartz ◽  
...  
Keyword(s):  
Best Interest ◽  
Current Form ◽  
Content Type ◽  
Doing Business ◽  
The Us ◽  
Retail Investors ◽  
Retail Investor ◽  
Standards Of Conduct ◽  
Investment Advisers ◽  
Proposed Regulation

Purpose To provide an overview of the US Securities and Exchange Commission’s (SEC’s) recently proposed rulemaking package relating to standards of conduct for investment professionals. The three proposals included: interpretation regarding the standard of conduct of investment advisers under the Investment Advisers Act of 1940; Form CRS which both registered investment advisers and registered broker-dealers would have to provide to retail investors; and proposed regulation best interest. Design/methodology/approach Reviews and summarizes the three individual proposals. Findings The SEC has proposed this rulemaking package in order to meet three goals: enhance retail investor protection and decision making, preserve investor choice and cost, and raise retail investor awareness of whether they are doing business with a registered financial professional. The SEC is looking for feedback, particularly from retail investors, on whether these proposals would achieve the SEC’s goals. Originality/value Summarizes the three proposals in a manner that provides insight into how investment advisers and broker-dealers would be required to conduct business with retail investors if the proposals are adopted in the current form.

scholarly journals Brokers As Fiduciaries

2009 ◽  
Vol 71 (3) ◽  
Author(s):  
Donald C. Langevoort
Keyword(s):  
Financial Crisis ◽  
Consumer Protection ◽  
Credit Ratings ◽  
Law Reform ◽  
Securities Law ◽  
Financial Products ◽  
Product Regulation ◽  
Standards Of Conduct ◽  
Investment Advisers ◽  
New Consumer

The first formal legislative package sent to Congress by the Obama Administration dealing specifically with securities law reform was not about the financial crisis issues of derivatives, securitization, or credit ratings—though these came shortly thereafter. Instead, it was about consumer protection. Having proposed a bold new Consumer Financial Product Commission but chosen to leave investment product regulation in the jurisdiction of the SEC rather than shift it to the new agency, the Administration sought to enhance the consumer protection powers of the SEC so that they would be comparable with what the proposed new agency could do with respect to non-securities financial products. Substantively, the headline reform proposal was the authorization for the SEC to promulgate rules to conform the duties owed by broker-dealers to their customers with the duties owed by investment advisers to their clients, holding both to the same fiduciary standards of conduct.

Negotiating Damages after One Step: Employment Team Move and Misuse of Confidential Information Cases

2020 ◽  
Vol 24 (3) ◽  
pp. 363-388
Author(s):  
Philippe Kuhn
Keyword(s):  
Fiduciary Duty ◽  
Confidential Information ◽  
Breach Of Contract ◽  
Injunctive Relief ◽  
One Step

This article addresses monetary remedies in employment team move and misuse of confidential information cases. It argues that, after the Supreme Court's decision in One Step (Support) Ltd v Morris-Garner, negotiating (previously Wrotham Park) damages offer a useful additional compensatory tool in misuse of confidential information cases. They can help overcome some of the difficulties with ordinary contractual damages, equitable remedies for breach of fiduciary duty and confidence and limitations in injunctive relief. While One Step is restrictive overall, there is a real role for negotiating damages in employment cases where misuse of confidential information is the sole or predominant breach of contract. The well-established Faccenda approach is suggested for identifying the requisite confidential information.

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