The Law Commission has published information about a new project on fiduciary duties of investment intermediaries. Consultation will take place in 2013 Oct. It can be seen here.
The statements they wish to address in relation to concern faced by stakeholders in the interpretation of fiduciary duties in this context are the following, which I will give a brief answer to (in brackets), but I must note I am not an expert on what an investment intermediary does.
it was not clear who in the investment chain was subject to fiduciary duties and what those duties were; (anyone with access to another's property or affairs for their benefit in a relationship based on trust and confidence. The duty owed by fiduciaries is the duty of loyalty meaning do not act with a conflict of interest in respect of the matters you agreed (whether expressly or through assumption) to be loyal)
their fiduciary duties required them to maximise returns over a short-time scale, precluding consideration of long-term factors which might impact on company performance; (concern must be placed here whether it is right to classify this as a fiduciary duty to maximise returns, this is probably more accurately described as a function of an investment intermediary but not a fiduciary duty)
their obligations were entirely defined and limited to their contractual obligations or required no more than a duty of care. (If they have access to another's property or affairs for their benefit then fiduciary duty of loyalty arises. That duty's standard is strict but its scope is circumscribed to the extent of what you agreed to be loyal to. Equity needs something to cling to. It cannot change the terms of a contract. The fiduciary must be loyaly and their interests must be subserviant to that of the principal/beneficiary on those matters agreed to be loyal to).
I have not blogged in a while. Hopefully now teaching is drawing to a close there will be some more regular updates. Hopefully I will return to this at a later date.
The statements they wish to address in relation to concern faced by stakeholders in the interpretation of fiduciary duties in this context are the following, which I will give a brief answer to (in brackets), but I must note I am not an expert on what an investment intermediary does.
I have not blogged in a while. Hopefully now teaching is drawing to a close there will be some more regular updates. Hopefully I will return to this at a later date.
