Study On Civil Liability Of Financial Institutions For Violating Suitability Obligation

The obligation of suitability,as one of the forms of preferential protection for investors,aims to balance the position of investors and financial institutions in the trading of financial product.China currently has a large number of regulatory norms related to the obligation of suitability,and has begun to confirm that financial institutions will bear civil liability for breach of the obligation of suitability,which is reflected in the newly revised Securities Law.The National Court of Civil and Commercial Trial Work Conference also made special provisions for the trial of disputes of financial consumer rights protection.Therefore,it is necessary to study the civil liability of financial institutions for breach of suitability in order to provide investors with adequate protection.The text is divided into the following four chapters:The first chapter firstly introduces the one-sided application of the principle of “let the buyer beware” in the trial of disputes caused by financial product transaction.It is no longer possible to reasonably adjust the unequal status of the two parties.Secondly,it introduces the gradual establishment of the obligation of suitability of financial institutions at the sector of regulatory and its content.Lastly,it analyzes the introduction of the obligation of suitability in the trial of disputes of financial product transaction,and takes the principle of "seller's due diligence" as the premise of the principle of “let the buyer beware” to provide sufficient relief for investors.The second chapter analyzes in detail what kind of civil liability will be constituted by a financial institution that violates its obligation of suitability.The obligation of suitability is a kind of concrete duty of the principle of “good faith” with a trend of legalization.Violation of the obligation of suitability will constitute a competition between tort liability and the liability of “culpa in contrahendo”,but there is no obvious pros and cons between the two kinds of liabilities,which can provide investors with basically the same degree of protection.The key to the establishment of liability lies in the judgment of causality and fault.For the purpose of special protection,the relevant regulation greatly reduces the difficulty of investors' proof.The third chapter discusses the application of civil liability for breach of the obligation of suitability.First,there is a joint liability of issuers and sellers under the model of consignment sale.Second,among the protection objects,professional investors and ordinary investors should be distinguished for different degrees of protection.Third,the content of proof can refer to the suitability norms at various levels.Fourth,there are two ways of the reduction and exemption of liability.Fifth,the possible application of punitive damages.The fourth chapter analyzes the problem in the trial of disputes caused by the breach of the obligation of suitability in our country,such as the rigidity of the review of risk,the oversimplification of the obligation to inform,and the inconsistent in the proportion of compensation liability.The article then proposed the following corresponding suggestions for improvement on the aforementioned issues: Procedures and substantive standards should be combined in the review of risk,and the inform obligation as an important content of appropriateness obligation should be identified in accordance with the subjective and objective standards,and the responsibility proportion of financial institutions and investors should be decided according to the duty of care of different investors.