| 2 Web JCLI|
Advocate of the High Court for Zambia;
Lawyer, Legal Department,
*Comments from colleagues who read through the earlier drafts of this paper are gratefully acknowledged. The interpretations and conclusions expressed in the paper are entirely those of the author. They do not necessarily represent the views of the World Bank, its executive directors, or the countries they represent.
Copyright © 2000 Kenneth Kaoma Mwenda.
First Published in Web Journal of Current Legal Issues in association with Blackstone Press Ltd.
While Chinese walls afford a good opportunity for financial institutions to manage confidential information, these walls can be ineffective when designed poorly. This article examines the legal aspects of managing conflict of duties in situations where a Bank uses Chinese walls to segregate confidential and material information obtained from clients. Fiduciary obligations of financial institutions such as Banks are examined and the article provides an international and comparative study on the subject.
"Chinese walls are a crucial part of the regulatory system for securities markets. They legitimise what would otherwise be unacceptable, and unlawful, conflicts of interests within integrated securities firms." (Berg. A, 1991)
That Chinese walls can be used to manage conflict of duties effectively, so as to protect clients from misuse or abuse of financial information by fiduciaries, such as Banks, is by no means a thesis free from difficulty. This paper examines the legal aspects of managing conflict of duties through the use of Chinese walls to segregate information. Indeed, the doctrines and principles of equity that are enunciated in the paper obtain in many common law jurisdictions, including the US, Zambia and the United Kingdom. It must be noted, however, that the confidential information being guarded by Chinese walls relates to some of the knowledge acquired from clients or other fiduciaries. What, then, are Chinese walls and what are the characteristics and difficulties associated with such walls?
Chinese walls, as was stated by the Law Commission in the United Kingdom (UK Law Commission, 1995, p. 97), are broadly `procedures for restricting flows of information within a firm to ensure that information which is confidential to one department is not improperly communicated (and this includes inadvertent communication) to any other department within the conglomerate.' In Zambia, for example, a Chinese wall can be erected under section 50 of the Banking and Financial Services Act 1994, which provides as follows:
"(1) A bank or financial institution and every director, officer and employee thereof shall maintain the confidentiality of all confidential information obtained in the course of service to the bank or institution and shall not divulge the same except -(a) in accordance with the express consent of the customer, or the order of a court; or
(b) where the interest of the licensee itself requires disclosure
(2) For the purposes of this section confidential information about a person includes information that is not public, concerning -(a) the nature, amount or purpose of any payment made by or to the person;
(b) the recipient of a payment by the person;
(c) the assets, liabilities, financial resources or financial condition of the person;
(d) the business or family relations of the person; or
(e) any matter of a personal nature that the person disclosed to the bank in confidence."
It is clear from the above statutory provision that the Banking and Financial Services Act 1994 of Zambia defines `confidential information' in a very broad sense. Indeed, categories of confidential information are not confined to those spelt out in the above statutory provision. They include other forms of non-public information obtained by a Bank in a Banker-customer fiduciary relationship. In the US, the National Association of Securities Dealers, Inc (NASD) defines a Chinese wall as:
"A term used to describe procedures enforced within a securities firm that separate the firms' departments to restrict access to non-public, material information. The procedures help NASD members avoid the illegal use of `inside' information." (NASD)
While procedures for setting up Chinese walls and the characteristics of these walls differ from one jurisdiction to another, and although Chinese walls are meant to protect clients from abuse of financial information, in instances where Chinese walls are not designed properly they may not manage conflict of duties effectively. (Barboutis. G, 1999)(1) Indeed, a recent report on Australia shows that:
"A landmark ruling by an Australian court may mean the end for Chinese walls in the country, and cause problems for firms looking to merge. The Western Australia Supreme Court in Perth has ordered leading law firm Philips Fox to relinquish long-standing client, Fletcher Construction, because of fears over a conflict of interests. Fletcher construction was involved in a dispute with another contractor, which had been represented by Hely Edgar for four years. However, when the firm later dissolved, the senior partner and staff went to Philips Fox. The judge dismissed claims that the Chinese wall would hold up and prompted the Western Australian Law Society to condemn the practice." (International Law Review, 1999)(2)
Addressing a closely related position in the United Kingdom, Berg observes that:
"The first decision is that of Sir Nicholas Browne-Wilkinson, the Vice-Chancellor, in David Lee & Co (Lincoln) v Coward Chance  Ch 259. During the preparation of the action, there was an amalgamation between the firm of solicitors acting for the liquidators and the firm of solicitors which had previously acted for some of the main defendants. The liquidators, who had incurred considerable expense instructing their solicitors, wished the amalgamated firm to continue to act for them. The defendants objected that confidential information about their defence had been given to one or more of the partners in the amalgamated firm and that any leakage of that information would be highly damaging to their defence Lord Browne-Wilkinson refused to allow the amalgamated firm to continue to act for the liquidators. He said:
When one has sensitive information in a firm or in any other group of people, there is an element of seepage of that information through casual chatter and discussion, the letting slip of some information which is not thought to be relevant but may make the link in a chain of causation of reasoning...I am afraid that on the information that I have I am not satisfied that the amalgamated firm has demonstrated that the Chinese walls that they are proposing to erect will be sound-proof. Experience in this court demonstrates that the maintenance of security on either side of Chinese walls in the context of the city does not always prove to be very easy. I think it is a very difficult task.
The second case is the majority decision of the Court of Appeal in Re A Firm of Solicitors, The Times, June 20, 1991. This also arose from a proposal that a large law firm should act in commercial litigation for one party, although it possessed confidential information concerning the other party to the litigation which it had obtained while acting for a client which was independent of, but closely associated with, that other party. Lord Justice Parker had no doubt that the law firm intended that their proposals for a Chinese wall would eliminate any risk of leakage and genuinely believed that these proposals would do so. However, he was not so satisfied that they would do so:
In my judgment, any reasonable man with knowledge of the facts in the case concerned, including the proposals for a Chinese wall, would consider that some confidential information might permeate the wall... I doubt very much whether an impregnable Chinese wall can ever be created." (Berg 1991, pp 23-24)
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A typical Chinese wall will be characterised by rules and regulations that relate to confidentiality and segregation of information. However, given that information is intangible it is often not too easy to `physically' identify each and every characteristic of a Chinese wall. In certain instances, though, the physical characteristics of a Chinese wall can be identified. As Cranston observes:
"Chinese walls...are designed to stem the flow of information between different parts of the bank. Institutionally a Chinese wall can involve physical separation (in some cases the occupation of different buildings); separate files for the functions separated by the Chinese wall with no access for someone on one side of the wall to a file on the other side; consequent restrictions on physical access and controls on computer access and fail-safe systems; and controlled procedures for the movement of personnel between different parts of the bank. In some financial institutions Chinese walls are underpinned by stop lists and no-recommendation policies. The reason is that whereas under the Financial Services Act 1986 (of the UK) an effective Chinese wall by itself is regarded as a defence to the breach of some regulatory rules... the common law some times requires more - disclosure or the cessation of the activity." (Cranston 1997, pp 31-32)(3)
In many cases, Chinese walls are designed as a set of rules, practices and business ethics that govern the fiduciary obligations of confidentiality and loyalty to clients. In essence, a Chinese wall will often be based not only on fiduciary law but also on rules and guidelines from both within and outside the firm. To build such a wall effectively, the wall must be based on rules that are both enforceable and justiciable. Through the adoption of such rules market confidence in the regulatory framework can be enhanced. The information monitoring and compliance mechanisms - that is, in regard to confidentiality and segregation of non-public and material information - can thus be addressed by both the internal management of the firm and the regulatory authorities (e.g. self-regulatory bodies such as NASD in the US). In a typical situation, such as the US, monitoring involves use of both external and internal resources. It must be noted, however, that external monitoring alone could prove less costly than a holistic and systemic approach to monitoring. That said, one of the major advantages of the holistic approach is that it provides for a better way (and a more transparent way) of screening both those inside the wall and those outside it.
Having looked at the major characteristics of a Chinese wall and how these walls are set up, it is submitted that some of the notable problems associated with Chinese walls are varied in nature (see Berg 1991, pp. 25-26) and that they depend on several factors which include the efficiency of the regulatory framework and the enforcement mechanism. Indeed, problems that could arise, say, in the case of a Chinese wall in a law firm or investment Bank might be different from those arising in the case of a Chinese wall in an accounting or auditing firm or in a stock-broking firm. However, the common thread between all these institutions is the law of fiduciary obligations. An argument can thus be advanced on the importance of stopping insiders benefiting from the use of non-public and material information gained in their capacity as insiders. Indeed, information which is non-public must be guarded from members of the public. In countries such as the United Kingdom, and many others, there have been efforts to re-enforce Chinese walls with regulatory rules like the UK Conduct of Business Rules under the Financial Services Act 1986. As Jarvis observes:
"Perhaps the most debated and important regulatory rule in this context (i.e. in the case of the UK) is Core Rule 36 which the Securities Investment Board (SIB) made under the powers given to it in s 48(2)h of the Financial Services Act 1986. Section 48(2)h gives the SIB power to make conduct of business rules `enabling' the segregation of information within a firm. The question is to what extent the Core Rule allows firms to escape liability under fiduciary law for knowledge that they have acquired." (Jarvis 1996)
Jarvis argues further that:
"...on the issue of conflicts of interest the rule (Rule 36) is silent. SIB Principle 6 mentions Chinese Walls as a method to control conflicts of interest. However, the courts require some evidence of the `sound proof' nature of a Chinese Wall, as a series of law-firm cases has shown which culminated in a comment by Parker LJ that he very much doubted whether an impregnable wall could be created except in very special circumstances... this shows a divergence of approach between the courts and the SIB..." (Jarvis 1996, p 112)
In the US, taking an example of the NASD, it is clear that some of its information monitoring techniques include the following:
"Other Surveillance Methods: In addition to the on-line SWAT systems, regulators employ other longer range computer analyses and reports that provide analysts with necessary information to identify and investigate for unusual activity or indications of rule violation. Another critically important aspect of monitoring the markets is addressed through field examination programmes whereby regulators make on-site inspections of securities firms to review their sales and trading practices, to ensure fair dealing with customers, to verify accurate and complete trade reporting, to review for manipulative or fraudulent conduct, and to examine `Chinese Walls' and other procedures for controlling the flow of non-public information in order to help prevent illegal insider trading." (NASD)
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At common law, the question `who is a fiduciary?' provides an interesting starting point to an inquiry on the legal problems surrounding Chinese walls. The nature and forms in which fiduciary duties present themselves cannot be reduced to one succinct statement.(4) As Hannigan observes:
"It is now generally agreed that the word `fiduciary' does not of itself identify a single class of relationships, nor can fiduciary duties be reduced to a single set of rules and principles which apply to all such relationships.(5) Before considering liability for breach of fiduciary duty, therefore, it is necessary first to determine whether ... would be regarded as fiduciaries and to whom they are fiduciaries; secondly, it is necessary to consider the particular duty or duties relevant to imposing liability..." (Hannigan 1994, p 132)
In line with the view that the word `fiduciary' does not of itself identify a single class of relationships, we look at what judges have said in England, the United States of America and Australia. In the English case of Re Coomber  1 Ch 723, 728 Fletcher L.J. observed:
"...Fiduciary relations are of many different types; they extend from the relation of myself to an errand boy who is bound to bring me back my change up to the most intimate and confidential relations which can possibly exist between one party and another where one is wholly in the hands of the other because of his infinite trust in him. All these are cases of fiduciary relations, and the courts have again and again, in cases where there has been a fiduciary relation, interfered and set aside acts which, between persons in a wholly independent position, would have been perfectly valid...."
Similarly, in the American case of Securities Exchange Commission v. Chenery Corporation 318 U.S. 80, 85 Frankfurter J. stated:
"...to say that a man is a fiduciary only begins the analysis, it gives direction to further enquiry. To whom is he a fiduciary...?"
The courts in Australia have often applied the `undertaking test' when determining whether or not a fiduciary relationship exist:
"[A fiduciary] is, simply, someone who undertakes to act for on behalf of another in some particular matter or matters. That undertaking may be of a general character. It may be specific and limited. It is immaterial whether the undertaking is or is not in the form of a contract. It is immaterial that the undertaking is gratuitous. And the undertaking may be officiously assumed without request." (Moffat 1994, p. 548)
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The common law position is that in managing conflict of duties an intermediary's duty to obey a customer's instructions rests on questions of fact (Mitchell v Newhall (1846) 15 M & W 308). What is important is to inquire whether or not an intermediary followed his customer's instructions. If the instructions were not clear and the intermediary interpreted them on the basis of the clear part of the instructions then the intermediary did discharge his fiduciary duty to obey the customer's instructions. However, there are other instances when an fiduciary could find himself confronted with a conflict of interests. For example, as the UK Law Commission observes:
"... the solicitors' professional conduct rules provide that a solicitor should not accept instructions to act for two or more clients where there is a conflict or a significant risk of conflict between the interests of those two clients. The guidance envisages that Chinese walls can only be used in very rare cases following the amalgamation of two firms and then only when the best interests of clients permit the amalgamated firm to continue to act and the clients have received full and frank independent advice and have subsequently consented to the arrangement. The rules of actuaries and insurance brokers are also stricter. It would be undesirable if a firm could rely on the less strict SIB (Securities Investment Board) rule as a defence to civil proceedings even though it had breached its own professional conduct rules." (UK Law Commission 1995, p 106)
At common law an intermediary owes his customer a duty of confidentiality (Standard Investments v CIBC  22 DLR (4th) 410). However, the information being guarded must have the necessary quality of confidence to merit protection. By contrast, if the information is `public property and public knowledge', no duty of confidence arises (in Saltman Engineering Co Ltd v Campbell Engineering Ltd  3 All E.R. 413 at 415 per Lord Greene MR).
In general, an action for breach of confidentiality may be based on some express or implied contractual obligation (Thomas Marshall (Exporters) Ltd v Guinle  3 All ER 193), or on `a broad principle of equity that he who has received information in confidence shall not take unfair advantage of it' (Seager v Copydex Ltd  2 All ER 415, 417 per Lord Denning MR). At common law, in determining whether or not a fiduciary ought to have known of the obligation of confidence, the courts have applied the reasonable man test spelt out by Megarry J in Coco v. AN Clark (Eng) Ltd  RPC 41, 47:
"It seems to me that if the circumstances are such that a reasonable man standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given to him in confidence, then this should suffice to impose upon him the equitable obligation of confidence. In particular where information of commercial or industrial value is given on a business-like basis and with some avowed common object in mind... I would regard the recipient as carrying a heavy burden if he seeks to repel a contention that he was bound by an obligation of confidence."
As a general rule, an intermediary must keep orders of his customer in confidence and with care. In Indata Equipment Supplies Ltd. (trading as Autofleet) v ACL Ltd (The Times, 14th August 1997) Lord Justice Simon Brown, Lord Justice Otton and Mr. Justice Owen held that when a finance house with whom a broker was arranging finance for a client used confidential information provided by the broker as the basis for making an agreement directly with the client, thus cutting out the broker, the mere fact of the receipt of confidential information did not create a fiduciary relationship between the finance house and the broker so as to give rise to fiduciary obligations. However, a blatant disregard for what should be commercial ethics and practice in the misuse of confidential information did amount to a breach of the equitable doctrine of confidence, and could also constitute the tort of unlawful interference with business. Arguments on the distinction of fiduciary obligations from the equitable doctrine of confidence are of little relevance here. Suffice it to say that the court further ruled that where parties enter into contractual relations at arm's length and understand what they are agreeing to, there is little scope for the law to add the extra dimension of fiduciary duties to the relationship which they have selected.(6)
By contrast, where the intermediary is an organisation, such as a Bank, and one of its departments is influencing the other departments by providing them with information on a client that is operating in competition with clients of the other departments, the transmission of information could prejudice the first client. Indeed, this would bring into play the concept of attribution of knowledge. In Kelly v Cooper  3 WLR. 936 an intermediary acted for both the buyer and the seller. It was held that where the nature of the intermediary's business is such that he deals with various parties in competition with each other, on either side of the buyer or seller, then the nature of the contracts between the intermediary and these customers respectively would determine whether or not there is a fiduciary duty to disclose instructions of one customer to the other. To overcome such problems, Chinese walls have been advocated by many commentators as a way of segregating information of customers (see Lipton and Mazur 1975 and 1976). Even so, the law courts have usually taken the view that Chinese walls do not afford a solution to the problem of attribution of knowledge (Re a Solicitor  1 All ER 353). A similar view has been advanced by the Law Commission in England. Addressing the position of law firms in England, the Law Commission observes:
"...Chinese wall has not been seen as providing satisfactory protection for interests of the former client and, despite the existence of a wall, the courts have required the law firms not to act on behalf of the new client..." (UK Law Commission 1992, p 144)(7)
By contrast, the regulatory rules set by the Securities and Investment Board (SIB) in the United Kingdom are underscored by the view that Chinese walls do provide effective segregation of information in certain instances.(8) As Bamford observes:
"The SIB (Securities and Investment Board) rules however recognise that the different divisions of an integrated securities house may well find themselves in such a position. The rules therefore permit the house to continue to act in these situations subject to the imposition of `Chinese walls' which effectively prevent the transfer of contaminating information from one department to another. However, the legal rules dealing with the imputation of knowledge within companies might well have the effect of ignoring the existence of the Chinese wall arrangement and produce the result that a securities house was in breach of its contractual obligation to its client even though the individuals within the securities house were unaware that the company was performing an act which amounted to a breach of contract with one of its clients." (Bamford 1997)
In contrast to the viewpoint of the Securities and Investment Board, the Law Commission, in its 1995 report, observes:
"a Chinese wall would not prevent the attribution of knowledge between the component parts of a company (although it might do so as between different companies which form part of a group)... unless appropriate provision is made in the contract between firm and customer, a Chinese wall cannot in all cases be relied upon, as a matter of private law, to limit the fiduciary duties the firm owes to the customer." (UK Law Commission 1995, p 97).
In the case of large partnerships, such as big law firms and big accounting firms in many parts of the Commonwealth, attribution of knowledge to partners would not be easy to prove. By contrast, the case of group trading companies provides a relatively straight forward case. Without proof of fraud or other factors that lead to the lifting of the corporate veil, attribution of knowledge to subsidiaries in a group or to the parent would flout the legal personality of these companies (Adams v Cape Industries Plc  2 WLR 657). Commenting on instances when the corporate veil can be lifted, Prentice observes:
"...There is a likelihood that the court will pierce the corporate veil in a parent-subsidiary situation were:
(a) the subsidiary is grossly under-capitalised,
(b) the affairs of the parent and the subsidiary are commingled, or
(c) the subsidiary is set up to enable the parent to perpetrate a fraud, although as regards this aspect of the rule the desire to limit liability does not constitute fraud." (Prentice 1991, p 77)
Thus, for group companies, such as Bank subsidiaries and the holding or parent Bank, attribution of knowledge could occur mainly where the corporate veil has been lifted.(9) On a similar note, the UK Law Commission observes:
"We have already set out the ... situation in respect of which we consider that the fiduciary should be protected. We consider that the new provision should address only the position of Chinese walls between departments in the same legal entity and should not be extended to Chinese walls between different companies within the same group. There are two reasons for this conclusion. First, there is not the automatic attribution of knowledge between different companies within a group which we consider operates between different departments within the same legal entity. As we have indicated, it is open to the companies within a group to organise their affairs so that attribution will not occur. Secondly, section 48(2)(h) [Financial Services Act 1986] deals only with Chinese walls within a single entity..." (UK Law Commission 1995, pp 102-103)
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This fiduciary duty is closely linked to the fiduciary duty to obey customers' instructions. We have already examined the fiduciary duty to obey customers' instructions and we noted how this obligation relates to the idea of managing conflict of duties. At common law, an intermediary owes a fiduciary duty of loyalty to his customers (Royal Brunei Airlines Sdn Bhd v Tan  2 AC 378). This duty entails that the intermediary must not favour one customer over the other whenever he is acting in a dual capacity. However, some of the legal problems that could be encountered here include the view that - as in the case of Royal Brunei Airlines Sdn Bhd v Tan  2 AC 378 where `knowing receipt' was distinguished from `knowing assistance', and thus making a third party that had knowingly received trust property liable to account as a constructive trustee - the effectiveness of using Chinese walls might be watered down by liability arising from either `knowing receipt' or `knowing assistance'. To overcome such a problem, there would be need to show that the use of a Chinese wall has succeeded in shielding the fiduciary from `knowingly receiving' the relevant information.
At common law, there is a duty on financial intermediaries to keep properly audited books of accounts. In preventing conflict of duties here, trusts law in many common law jurisdictions provides that culpable or innocent depletion of clients' assets, by an intermediary (and/or any constructive trustee), will attract some equitable remedies.(10) To illustrate, in Brinks Limited v Abu-Saleh & Others  1 WLR 1478, the defendant was a lady who had accompanied her husband on trips to Zurich, during which he laundered funds handed to him by a friend. The source of the funds was the theft, several years before, of gold bullion under the custody of Brinks Limited. The theft had occurred because a security guard had assisted robbers to gain entry to the premises he was guarding. The argument in the case was that the lady concerned was liable to Brinks Limited as a constructive trustee, following the principles laid down in Royal Brunei Airlines. The argument was that she had behaved dishonestly, and that her behaviour had assisted a breach of trust. The claim failed, on the basis that her presence on trips with her husband did not provide assistance in any relevant manner.
This paper has examined the legal aspects of managing conflict of duties in situations where a Bank uses Chinese walls to segregate confidential and material information obtained from clients. It was shown that in certain instances Chinese walls can afford a good opportunity to manage conflict of interests. Ideally, Chinese walls are meant to protect clients from abuse or misuse of financial information by an intermediary or a fiduciary. Here, information could relate to knowledge acquired from the client or from other fiduciaries of the client. The paper took an exploratory dimension in evaluating some of the legal problems associated with the use of Chinese walls in managing conflict of duties.
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Bamford, C (1997) `Banker/Customer Relationship: Fiduciary Duties And Conflict Of Interest,' 25(2) International Business Lawyer 79.
Barboutis, G (1999) `Prince Jefri Bolkiah v KPMG: The Rejection of an "inadequate" Chinese wall' 20(9) The Company Lawyer 292.
Berg, A (1991) `Chinese Walls Come Tumbling Down' 10(2) International Financial Law Review 23.
Burn, E H (1996) Trusts And Trustees Cases And Materials (London: Butterworths).
Chazen, L (1976) `Reinforcing the Chinese Walls: A Response' 51 New York University Law Review 552.
Cranston, R (1997) Principles of Banking Law (Oxford: Clarendon Press).
Gardner, S (1996) The Law Of Trusts (Oxford: Clarendon Press).
Hannigan, B (1994) Insider Dealing, 2nd ed (London: Longman).
Hayton, D J (1975) Cases and Commentary On The Law Of Trusts (London: Stevens and Sons).
Hayton, D J (1989) The Law of Trusts (London: Sweet and Maxwell).
International Law Review (1999) `End of Chinese Walls In Australia' 18(9) International Finance Law Review 5.
Jarvis, K (1996) `Fiduciary Duties: Law Commission Report On Fiduciary Duties and Regulatory Rules' 17(4) The Company Lawyer 111.
Lipton, M and Mazur, M (1975) `The Chinese Wall Solution to the Conflict Problems of Securities Firms' 50 NYULR 459;
Lipton, M and Mazur, M (1976) `The Chinese Wall: A Reply to Chazen' 51 NYULR 579.
McVea, H (1993) Financial Conglomerates and the Chinese Wall: Regulating Conflicts of Interest (Oxford, New York: Clarendon Press).
Moffat, G (1994) Trusts Law: Text and Materials (London: Butterworths).
National Association of Securities Dealers Inc (NASD) web sites:
Riddall, J G (1996) The Law Of Trusts (London: Butterworths).
Rider, B and Ashe, M (1995) The Fiduciary, the Insider and the Conflict (Dublin, Brenhon: Sweet and Maxwell).
Schmitthoff C M and Wooldridge F (1991) Groups of Companies (London: Sweet and Maxwell).
Sealy, L S (1962) `Fiduciary Relationships' Cambridge Law Journal 69.
Times Newspaper Thursday 14th August 1997.
Todd, P (1991) Textbook On Trusts (London: Blackstone).
UK Law Commission (1992) Fiduciary Duties and Regulatory Rules (London: HMSO) Consultation Paper No 124.
UK Law Commission Report (1995) Fiduciary Duties and Regulatory Rules (London: HMSO) Report No 236.
(1) See also some Australian cases eg Mallesons Stephens Jacques v KPMG Peat Marwick  WAR 357; Carindale Country Club Estate Pty Ltd v Astill (1993) 115 ALR 112. Cf the New Zealand case of Russell Mc Veagh McKenzie Bartlett v Tower Corporation, unreported, September 1998, New Zealand Court of Appeal, [discussed in Barboutis, G (1999)].
(2) Cf Mallesons Stephens Jacques v KPMG Peat Marwick  WAR 357; Carindale Country Club Estate Pty Ltd v Astill (1993) 115 ALR 112.
(3) See also generally Bosworth-Davies, R (1995) `The Compliance Officer's Role' in Rider, B and Ashe, M (eds) The Fiduciary, the Insider and the Conflict (Dublin, Brenhon: Sweet and Maxwell).
(4) See Securities and Exchange Commission v Chenery Corporation 318 U.S. 80. See also Bamford, C (1997) `Banker/Customer Relationship: Fiduciary Duties And Conflict Of Interest,' 25(2) International Business Lawyer 79.
(5) See Sealy, L S (1962) `Fiduciary Relationships' Cambridge Law Journal 69.
(6) The relationship of broker to finance house was held not to fall within the established categories already recognised by the law. The parties were at all times at arm's length in the market. See also Clark Boyce v Mouat  1 AC 428.
(7) For a contrary, but less persuasive view see Supasave Retail Ltd. v Coward Chance  1 All ER 668.
(8) See for example SIB Core Rule 36.
(9) Also, different regional or local customs, recognised widely in various national jurisdictions, could require non-disclosure or full disclosure to be made to the affected clients. See UK Law Commission (1995) Fiduciary Duties and Regulatory Rules (London: HMSO) Report No 236 pp 103-104
(10) For a detailed reading see Moffat, G (1994) Trusts Law: Text and Materials (London: Butterworths) pp 575-583; Cf Royal Brunei Airlines Sdn Bhd v Tan  2 AC 378 and Brinks Limited v Abu-Saleh & Others  1 WLR 1478. See also Todd, P (1991) Textbook On Trusts (London: Blackstone) pp 360-390; Gardner, S (1996) The Law Of Trusts (Oxford: Clarendon Press) pp 226-234; Hayton, D J (1989) The Law of Trusts (London: Sweet and Maxwell) pp 16-20 and 124-129; Hayton, D J (1975) Cases and Commentary On The Law Of Trusts (London: Stevens and Sons), pp 351-385; Burn, E H (1996) Trusts And Trustees Cases And Materials (London: Butterworths) pp 249-250; and Riddall, J G (1996) The Law Of Trusts (London: Butterworths) pp 434-439.