Investor Protection in the UK: The Duties of Investment Managers

Abstract

This paper explores the duties owed by investments managers in the UK, comprised of duties derived from equity, common law, regulation and contract. It offers a critical analysis of how private law duties apply to investment managers, and discusses the challenges of applying such general duties to modern investment management businesses which serve many clients at a global level. A review of relevant case law, statutory law and regulation is undertaken to identify the duties and interactions between the different branches of law. It is argued that the duties under regulatory framework applicable to investment managers incorporates fiduciary duties of trust and loyalty and the common law duty of care, but applies such principles in a more practical and proportionate way. This paper concludes that the tailored and sophisticated approach of regulation and under contract creates an appropriate balance between ensuring adequate investor protection and enabling investment managers to operate without undue impediments.