Research On The Appropriateness System Of Investors In China

Investors suitability system,in brief,is selling appropriate securities products to the right investors,which is an effective to protect the investors at a disadvantage in securities trading.The investor suitability system originated in the USA.With the development of securities market,new securities products emerging one after another,and the growing financial risk,it has become an important component of capital market's investors protection system by now.It has been widely adopted by HK,Taiwan and extraterritorial sophisticated capital markets and they have established relatively comprehensive suitability rules to protect investors' legitimate interests.In recent years,with our country's capital market system becoming more perfect,the investor suitability system has been also introduced into China,and it has become a basic system in the fields of Growth Enterprise Market(GEM),financial futures,margin trading business,and others.But because China started late on this system,coupled with the lack of systematic theoretical research of it,our country has not yet made an uniform legal provision,leaving the existing normative documents decentralized and soft,and they are on a low level.So there are some problems in our suitability system,such as the basic positioning is not right,investor and product classification criteria are imperfect,which obstacle the system functioning well.The purpose of this paper ison the basis of combingintegration of sophisticated capital markets' legislative pattern of other countries & Hong Kong & Taiwan,to analysis and summary enlightenment of external experience to China's mainland.Then rethinking our current investor suitability rules,put forward specific perfection suggestion.Specifically,with investors' interests protection as the fundamental starting point,we will by the means of defining the concept and scope of the investor suitability system,and establish uniform investor and products classification criteria,to ensure that the securities company will recommend or sell securities to investors after fulfilling obligations of Know Your Customer,Know Your Product and recommending appropriately andinformation and risk disclosure.Through clarifying liability of securities company when it violates the obligation of investor suitability,establish a diversified dispute settlement mechanism,in order to provide investors with fully effective right relief way,to resolve securities disputes effectively.And build suitability rules system suitable to China's capital market,to promote the development of securities market prosperity and stability.