Final answer:
Brokers supervise their agents by implementing regulatory programs, reviewing licenses, innovating services, investigating complaints, and ensuring legal compliance. Internal regulation and the Enforcement Bureau help maintain industry integrity and protect public interests.
Step-by-step explanation:
Brokers supervise and police the business-related conduct of their agents by developing and implementing regulatory programs, processing applications for licenses, promoting the development of innovative services, conducting investigations, analyzing complaints, and ensuring compliance with relevant laws and ethical standards.
This internal regulation is crucial for maintaining the integrity of the securities industry and includes punitive measures for those who violate the law. Within firms and the broader financial industry, there are established procedures for reporting and dealing with unethical or illegal activities, though these can be challenging due to potential conflicts with organizational loyalty and the personal costs associated with whistleblowing.