Shingle Theory

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DEFINITION

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

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.


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