Fiduciary Duty and the Market: Private Law and the Public Good

17 Pages Posted: 31 Jul 2008

See all articles by Pamela F Hanrahan

Pamela F Hanrahan

UNSW Business School; University of Melbourne - Law School


One of the key goals of securities regulation is to maintain confidence in financial markets. That confidence depends in part on participants in the market believing that others act with integrity - including that securities intermediaries (such as broker/dealers, advisers and CIS operators) act in furtherance of their clients' interests, rather than their own, in discharging their functions in those markets. Securities regulators and regulatory systems have adopted various approaches to ensuring the (actual and perceived) loyalty of intermediaries to their clients' interests, including treating securities intermediaries as fiduciaries or seeking to subject them to 'fiduciary-sounding' statutory duties in relation to conflicts of interest. In Australia, the 'intermediaries as fiduciaries' approach was recently tested in Australian Securities and Investments Commission v Citigroup. This paper argues that ASIC v Citigroup usefully illustrates some of the difficulties of adopting the (private) law of fiduciary duty as either a means or a model for realizing the (public) good of confidence in the integrity of securities intermediaries.

Keywords: Securities intermediaries, fiduciary duty, securities regulation

JEL Classification: G28, K22

Suggested Citation

Hanrahan, Pamela F, Fiduciary Duty and the Market: Private Law and the Public Good. U of Melbourne Legal Studies Research Paper No. 347, Available at SSRN: or

Pamela F Hanrahan (Contact Author)

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010

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