"Conduct of Business Regulation," in Oxford Handbook of Financial Regulation 537 (Niamh Moloney, Eilis Ferran, & Jennifer Payne eds., 2015)
33 Pages Posted: 2 Jul 2014 Last revised: 8 Oct 2016
Date Written: June 30, 2014
This chapter provides a survey and comparative analysis of conduct of business (COB) regulation. COB regulation governs financial intermediaries’ conduct toward their clients, that is, toward the actors – whether individuals or institutions – with whom financial intermediaries transact in providing financial products and services. Modal regulatory strategies include anti-fraud rules, and duties of care, loyalty, fair-dealing and best-execution – and variants of these duties.
The chapter describes the justifications for COB regulation, the modal regulatory strategies used and the complex frameworks within which COB regulation operates. It then generally assesses US COB regulation, focusing on the regulation of broker-dealers and investment advisers. It outlines important market and regulatory developments over the past several decades and draws comparisons with corresponding EU and Australian COB regulation. The chapter concludes by discussing reforms proposed or adopted in the wake of the global financial crisis of 2007-09.
Keywords: conduct of business regulation, business conduct, broker-dealer, investment adviser, comparative analysis, MiFID, fiduciary duties, agency law, conflicts of interest
JEL Classification: K20, K22, K23, K42
Suggested Citation: Suggested Citation
Tuch, Andrew F., Conduct of Business Regulation (June 30, 2014). "Conduct of Business Regulation," in Oxford Handbook of Financial Regulation 537 (Niamh Moloney, Eilis Ferran, & Jennifer Payne eds., 2015); Washington University in St. Louis Legal Studies Research Paper No. 14-06-04. Available at SSRN: https://ssrn.com/abstract=2460966 or http://dx.doi.org/10.2139/ssrn.2460966
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