Measures for Preventing and Managing Conflicts of Interest in Investment Firms
Faculty of Law University of Belgrade
July 19, 2010
PRIVATE LAW REFORM IN SOUTH EAST EUROPE, LIBER AMICORUM CHRISTA JESSEL-HOLST, Mirko Vasiljevic, Rainer Kulms, Tatjana Josipovic, Maja Stanivukovic, eds., Belgrade, 2010
In this paper the author analyses selected measures for preventing and managing conflicts of interest in investment firms. The first part of the paper discusses prevention and management of conflicts as possible goals of specific regulation. Here, the author emphasises the shift in regulatory approach on the EU level, given the fact that MiFID and its implementing directive require effective management of conflicts of interest instead of prevention of their occurrence, which differs from the position of the previous Investment Services Directive. The main part of the paper deals with the selected concrete measures for preventing and managing conflicts of interest. The author has chosen to analyse those measures that are most commonly used and are of the greatest importance as a way of tackling conflicts-of-interest problems. These measures include: separation of functions, refraining from trade and/or provision of services (restricted and stop lists, no-recommendation policies) and organisational measures (Chinese Walls, watch lists, compliance officers). The analysis of a specific regulation and legal effects of implemented measures is primarily based on Serbian and EC law. To this end, the author uses a comparative approach in order to show the discrepancies between solutions adopted by these two systems, which leads to the conclusion that Serbian regulatory approach is obsolete and needs to be updated with the latest developments in this field.
Number of Pages in PDF File: 12
Keywords: capital market, conflict of interest, prevention, management, MiFID, Serbian law
JEL Classification: K22Accepted Paper Series
Date posted: July 19, 2010 ; Last revised: April 17, 2011
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