A Study On The Principle Of Appropriateness Of Financial Consumers' Protection

Since the global financial crisis in2008, how to strengthen supervision and inhibit excessive liberalization of financial markets,and how to solve the system risk in financial markets in order to protect the interests of investors become a common topic around the world. With the internationalization process of financial markets,the trend of the mixed operation for world financial industry and the endless financial innovation,the financial institutions have been offering various financial products. The consumers’property rights have been repeatedly violated due to the information asymmetry between consumers and financial institutions. In recent years, as a unified concept that "financial consumers" has been widely used across the banking, securities, futures, insurance and other areas, in order to protect the consumers in the transaction of financial products.The suitability doctrine, which develops from the securities field, first as the industry self-discipline rules, has become an article in law. It means the financial institutions should sell the financial products to the right people, eliminating inequalities between consumers and financial institutions, which can protect the interests of financial consumers. In the developed countries, suitability doctrine has become the duty of law including the customer classification, legal responsibility and the institutions’behavior. The theoretical foundation of suitability doctrine is the fiduciary duty which is applicable in the civil law countries, and its content does not exceed the scope of the good faith doctrine.In the application of suitability doctrine, the financial institutions should bear the civil responsibility when they haven’t complied the rules such as the matching requirements and risk disclosure obligations. Combined with the present situation of the financial consumers’ protection in China, on one hand,"financial consumers" is still not a legal definition which leads to the confusion in the application of suitability doctrine, on the other hand, the current regulations for the suitability doctrine is embodied in the administrative regulations, industry self-discipline rules, laws etc. Obviously the current rules are not enough to protect the financial consumers, it is necessary to improve the suitability doctrine as a certain kind of obligation in the financial law of our country and constitute a law system for the protection of financial consumers, which has practical significance in China.