MyComplianceOffice Blog

Compared with other industries, the financial services industry inherently has an elevated risk of conflicts of interest. In particular, connected persons and close personal relationships can influence decisions that result in significant business and financial impact. After all, we’re all human and sometimes act based on emotion. Unfortunately, those human, emotional connections can sometimes lead to severe conflicts.

The U.S. Securities and Exchange Commission adopted proposed amendments to Rule 10b5-1 to enhance disclosure requirements and investor protections against insider trading. According to the SEC release, "the final rules aim to strengthen investor protections concerning insider trading and to help shareholders understand when and how insiders are trading in securities for which they may at times have material nonpublic information."

If you’re in Compliance, you know the crucial role that the Chief Compliance Officer plays in helping to maintain integrity in the securities industry and preventing violations. CCOs’ jobs are challenging enough given the wide range of obstacles they face day to day without having to routinely worry about whether simply carrying out their responsibilities will subject them to personal liability.

In late 2022, the Monetary Authority of Singapore (MAS) announced a complete ban on payment for order flow (PFOF) in Singapore. The move is designed to protect investor interests by mitigating the risk of conflicts of interest arising in brokers’ best execution obligations to their customers. The PFOF ban will commence on 1 April 2023 and can affect financial firms and individuals operating under a capital markets services (CMS) licence in Singapore.

The preservation of healthy financial markets relies on having safe, properly regulated environments where investors can confidently trade securities. Unfortunately, high-profile insider trading cases have grabbed the spotlight in recent years.