The following is my answer to a Quora question: “Do
broker-dealers have a fiduciary duty to their clients?”
I am answering this specific to Singapore. Within the context of local law, the fiduciary
is expected to exercise loyalty towards his principal and is bound by strict
legal obligations. The primary
responsibility is to act in good faith towards the principal. Acting in good faith means avoiding conflicts
of interest, and not unduly profiting from that relationship.
To be a broker in Singapore means having a licence,
and an RNF code. Part of the licensing
programme includes an emphasis on ethics, and there is a strict compliance
regime enforcing this. As such, by law,
the broker must exercise fiduciary duty. Failure to do so has severe legal consequence.
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