Research On Civil Liability Of Securities Firms For Violating Investor's Suitability Obligation

According to the long-standing concept of "buyer beware",all losses and gains are borne by the individual investor after the investor buys the product.However,in view of the development of the financial sector,the concept of "buyer beware" has been unable to solve the situation in which securities companies recommend to investors products that are not in line with their risk tolerance,thus causing investors to suffer losses.In order to safeguard the legitimate rights and interests of investors,it is necessary to stress the investor's proper obligation of securities companies to restrain their behavior.Since the relevant provisions on the legal liability of the system in China mainly focus on the assumption of administrative liability,there is a lack in the field of civil liability,and administrative liability aims at deterring and punishing the investors.The assumption of civil liability is a key link in the practice of investor suitability system.This paper analyzes the civil liability of perfecting the investor's suitability obligation of Chinese securities companies from four parts:The first part,the securities company violates the investor's proper duty civil liability summary.The obligation to clarify the appropriateness of investors in securities companies refers to the obligation of securities companies to provide different investors with financial products or services appropriate to their investment objectives(mainly risk tolerance)in an appropriate manner.This paper introduces the theory about the property of civil liability of securities companies violating the proper obligation of investors,and draws the conclusion that distinguishing liability theory is the most reasonable theory at present.At the same time,it is clear that the improvement of civil liability conforms to the legislative purpose of protecting the legitimate rights and interests of investors,to the requirements of perfecting the legal liability of securities companies,and to the stability of the capital market set the requirements for healthy development.The second part is the experience of civil liability for breach of investor's suitability obligation by securities companies outside the region.This paper introduces the experience of the United States,the republic of Korea,the European Union and Taiwan in China,and concludes that the experience of foreign countries in defining the civil liability attributes of securities companies,diversification of dispute resolution mechanisms,and the establishment of special funds are of reference significance to China's mainland.In the third part,the present situation and existing problems of civil liability of Chinese securities companies in violation of investors' suitability obligations.The following problems exist in the field of civil liability of securities companies in violation of investors' suitability obligations: first,the attribute of civil liability is vague;second,the distribution of proof liability among the parties is unreasonable;third,the reason for exemption is not clear;fourth,the compensation for damages is low;and fifth,the supporting mechanism for resolving disputes outside litigation is not perfect.The fourth part,our country security company violates investor's appropriateness obligation civil liability consummation proposal.Firstly,the constitution of the liability of the securities company for violating the investor's appropriateness obligation is clarified,and the civil liability attribute and the constitution of tort liability are clarified.Second,to implement the burden of proof;Third,make clear the legal exemption of the securities company;Fourth,introduce punitive damages liability;Fifth,improve the dispute resolution mechanism,improve the internal dispute resolution mechanism,strengthen the role of arbitration in dispute resolution and set up a special to make up for investors' damage.