Probe Into The Civil Liability Of Financial Institutions For Violating The Suitability Obligation

In recent years,the financial market has continued to develop and various financial wealth management products have become increasingly abundant.In the field of financial product sales,it is not uncommon for sales agencies to inadequately disclose risks and make inappropriate recommendations,resulting in investor losses.The issue of legal liability for breach of the suitability obligation has also been discussed in the field of financial law.Due to the immature development of the suitability obligation in China,there are still major controversies over how to determine the nature of civil liability for breach of the suitability obligation,how to determine the cause and effect and the amount of compensation when the court is involved in a suit of suitability.This is also the main issue to be discussed in this article.The first part gives an overview of the theory of suitability obligation,introduces the concept,source,and main content of suitability obligation,and analyzes the current domestic system of suitability obligation.The academic community generally believes that the suitability obligation was originally a moral obligation,which originated in the field of American securities trading,and to the present age,the suitability obligation has gone through a process of transforming from moral obligation to legal obligation and from common law obligation to statutory law obligation.The earliest introduction of the suitability obligation rule in China occurred in about 2005.After more than ten years of development,the legislative requirements for the appropriateness of financial institutions are still in a continuous absorption and improvement stage.Normative documents and self-regulatory norms formulated by industry self-regulatory organizations.The second part is based on the collation and analysis of adjudication cases of suitability obligation,from the perspective of adjudication time,the cause of the dispute,the defendant of the case,the trial procedure and the results of the adjudication.Through analysis,it can be seen that there are major differences in the handling of cases involving suitability obligation by local courts.The scope of the court's discretion is too large and the judgment documents are inadequate,which can easily lead to different cases in the same case.This can also prove that the article discusses the civil liability of financial institutions for breach of the suitability obligation to have greater practical value.The third part focuses on analyzing the nature of civil liability for financial institutions' breach of the suitability obligation.At present,consensus has been reached in theory and practice regarding the financial institutions' need to bear civil liability for breach of suitability obligation.However,there are still major disputes over the nature of civil liability,mainly including the theory of contractual negligence,liability for breach of contract,tort liability,Responsibility competition says four views.This article considers that the legal nature of the obligation of appropriateness shall be a legal obligation,and the breach of legal obligations shall bear the liability for negligence or tort of contracting.Comparatively speaking,the use of contracting negligence liability has major deficiencies,and characterizing the nature of civil liability for financial breach of suitability obligation as tort liability has a more solid theoretical and practical basis.The fourth part elaborates on the subject of liability for breach of the suitability obligation.Financial product sales agencies violate the suitability obligation,improperly promote related financial products to investors,causing losses to investors,and there is no doubt that product sellers bear responsibility.As to whether financial product issuers and sellers should bear joint and several liability,Controversial.Based on the analysis of the legal relationship between financial product issuers and sellers and the nature of civil liability for breach of the suitability obligation,this paper concludes that the financial product issuer and seller belong to a contract agency relationship.When financial product sales If the seller violates the suitability obligation,the seller shall bear the responsibility.The fifth part analyzes several other important issues in the dispute over breach of the suitability obligation by financial institutions,including the determination of the causal relationship between the breach of the suitability obligation and the investor's loss,the determination of the scope of damages compensation,and the issue of liability limits.This article considers that the theory of "causal relationship" in German tort law may provide a useful reference in the determination of causality in the theory of causality.In the specific case,it is necessary to first judge that “if the financial institution does not breach the suitability obligation,investors will not suffer losses”,and then demonstrate that “the breach of the suitability obligation by financial institutions usually results in losses for investors”.In the case of multi-cause and oneeffect situations,in the case where the behavior of a cause constitutes an infringement,the liability is determined according to the force exerted by the cause on the consequences of the damage.As for the scope of financial liability for breach of the suitability obligation,it should be limited to the loss of investor's principal,and punitive compensation liability is not applicable.For specific determination,the judgment can be comprehensively combined with the principle of neglect of negligence and the principle of buyer's responsibility.