THE RELATIONSHIP BETWEEN REGULATIONS GOVERNING THE FINANCIAL SERVICES INDUSTRY AND FIDUCIARY DUTIES UNDER THE GENERAL LAW
This chapter concerns the approach courts are likely to adopt to regulatory rules made in the public law sphere which conflict with what, apart from the rules, would be required by the general law. Although it is difficult to consider this without also considering what approach they ought to adopt, as that question will be considered in the Law Commission's forthcoming Consultation Paper on this topic, I shall attempt to do so.
The topic was referred to the Law Commission by the Department of Trade and Industry and the Commission circulated an Issues Questionnaire in November 1990 to assess the extent to which the relationship between the two sets of rules is giving rise to practical difficulty. The reference is confined to public law regulation but although the question whether an activity is within the public law sphere can be a tricky one, this need not concern us since financial services clearly are.1 Again, while the reference includes duties of care, as this part of the book is concerned with fiduciary obligations this chapter focuses on the relationship of regulatory rules with four overlapping equitable duties imposed on those who act on behalf of clients. These are the 'no conflict' rule, the 'no profit' rule, the undivided loyalty rule, and the duty of confidentiality.2 One of the hallmarks of equity is its flexibility and the intensity of these duties varies according to the nature of the particular____________________