Shingle Theory

AAA

DEFINITION of 'Shingle Theory'

A suitability doctrine first introduced by the Securities and Exchange Commission in the 1930s. The idea is that a broker who hangs out a shingle will represent his or her customers fairly and responsibly when making suggestions regarding securities.

INVESTOPEDIA EXPLAINS 'Shingle Theory'

Also referred to as "fiduciary duty", these suitability doctrines were originally used to ensure the protection of investors from unscrupulous broker-dealers.

Here, "shingle" refers to a small sign, indicating a professional office.

RELATED TERMS
  1. Security

    A financial instrument that represents: an ownership position ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in ...
  3. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  4. Broker-Dealer

    A person or firm in the business of buying and selling securities, ...
  5. Volcker Rule

    The Volcker rule separates investment banking, private equity ...
  6. Environmental, Social And Governance ...

    A set of standards for a company’s operations that socially ...
Related Articles
  1. Defining Illegal Insider Trading
    Economics

    Defining Illegal Insider Trading

  2. Policing The Securities Market: An Overview ...
    Investing Basics

    Policing The Securities Market: An Overview ...

  3. Are professionals, such as financial ...
    Investing

    Are professionals, such as financial ...

  4. My company is the trustee of our 401k ...
    Options & Futures

    My company is the trustee of our 401k ...

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center