On Brokerage Fiduciary Duty Study

The financial industry takes the good faith as a foundation. There is a trust relationship between brokerages and their customers and investors. The brokerages get the great profits and basic capital, so they should bear the corresponding obligation to be faithful. For the brokerage having great social influence, general asymmetry information existing in finance and securities markets, the huge conflict of interest in business, the promote of interests and the complexity of business, the more strict integrity requirements of the brokerage’s business and regulatory obligations become a common requirement. Through defining fiduciary duty and brokerage, the conclusion of the broker having a fiduciary duty is derived, the specific securities fiduciary duty is described, the concrete content of the fiduciary duty on brokerage is explained. And then through an in-depth analysis of the specific business on brokerage, explained one of the fiduciary duties, and summarized the real dishonest phenomenon existing in reality at present, from the perspective of both discusses the performance of fiduciary duty for brokerage. Finally, discussed some of the views of brokerage fiduciary duty liability by using the method of economic analysis, such as the costs and benefits combining with the new U.S. financial reform bill.