The Effects of Sustainability Policies on Investor Protection in the EU, UK, and US

In the last few years various ESG regulations have been implemented in the EU, US, and UK to improve investor protection. These regulations vary somewhat, but one commonality is that they all build on the existing investor protection frameworks. This article finds that while imposing additional obligations on advisers and providing some opportunities for investors, not all measures will prove effective. Instead, they tend to reflect the benefits as well as the drawbacks of the existing investor protection frameworks rather than addressing them.

1. Introduction

20 years ago, The Simpsons aired an episode in which Homer invests the family's entire life savings into one company after receiving some bad advice. Unfortunately, the company goes "super-duper" bankrupt and Homer ends up working as a human guinea pig amongst other typical TV hijinks and shenanigans.2 While imaginary, fiction often mirrors reality. This is t...

Verder in dit artikel:

1. Introduction

2. European Union

2.1. Background

2.2. Suitability Assessment

2.3. Disclosure Requirements

2.3.1. EU

2.3.2. UK

2.4. Organizational requirements

2.4.1. Product Governance

2.4.2. Inducements

2.4.3. Conflicts of Interest

2.5. Discussion

3. United States

3.1. Background

3.2. Fiduciary Duty

3.2.1. General Principle

3.2.2. Duty of Care

3.2.3. Duty of Loyalty

3.3. Disclosure Requirements

3.4. Organizational Requirements

3.5. Discussion

4. Comparing the EU, UK, and US

4.1. Structure

4.2. Suitability Assessment

4.3. Disclosure Requirements

4.4. Organizational requirements

5. Conclusion