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The Law of Financial Advice, Investment Management, and Trading by van Setten, Lodewijk (14th February 2019)

4 Legal and Regulatory Duties to Protect the Client’s Interest

From: The Law of Financial Advice, Investment Management, and Trading

Lodewijk van Setten

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved.date: 17 September 2019

Subject(s):
Regulation of banks — Capital markets — Investment business

This chapter provides an overview of key legal and regulatory concepts that operate to control the conduct of investment firms who provide financial advisory, portfolio management, brokerage, or dealer services, including the regulatory duty to act fairly and in the best interest of the client, the duty to provide information or to advise, and duties to manage conflicts. Drawing in particular on the relevant provisions of Markets in Financial Instruments Directive (MiFID) II, the chapter first explains the scope of the investment firm’s responsibility with respect to the provision of information on a certain investment service or investment product. It then considers caveat emptor versus duty to protect the interest of the investor, with emphasis on best interest and conflict rules in MiFID II. Finally, it examines the regulatory control framework for conflicts of interest, with a focus on inducements and remuneration policies in the financial services sector.

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