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Investment advice and corporate finance
Module 12Investment Management and Corporate FinanceAn exchange holding company finds that a fee change which would lift its profits would also weaken protection for retail investors. How does the CMSA require it to resolve this?
Section 21(2) of the CMSA requires an exchange holding company, in performing its duties, to act in the public interest with particular regard to the need to protect investors, and to ensure that where its own interest, or any interest it must serve under the law relating to corporations, conflicts with that public interest, the public interest prevails. Its duties to its own shareholders therefore give way. The Risk Management Committee under s.22 formulates risk policies for the board; it cannot authorise a departure from s.21(2). Nothing in s.21 sends such conflicts to the Minister for a decision. Source: CMSA 2007 ss.21(2), 22 (as at October 2026).
Candidates think company-law duties to shareholders override the statutory public-interest duty of a market operator.
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