The Civil Liability Of Financial Institutions On Violating The Suitability Obligation

In recent years,with the rapid development of financial markets,there have been more and more disputes between investors and securities companies.In addition to the disputes caused by the typical four types of securities infringements,there has also been an increasing number of disputes over compensation for losses caused by infringements of securities companies that violate the investor's appropriateness obligations.However,due to the legal system and judicial practice in our country,the norms of the obligation of appropriateness are mostly scattered in the self-discipline norms of various business fields,the regulatory documents of regulatory agencies and departmental regulations.Responsibility.For a long time,the concept of "buyer conceit" pursued by commodity trading has been deeply rooted in the hearts of the people,so that the legitimate rights and interests of investors have not been effectively protected.In the case of disputes over financing and securities lending contracts handled by the author,because the investor did not have sufficient evidence to prove that there was a direct causal relationship between the investor's loss and the securities company,the court rejected the lawsuit.The court held that investors should also be held accountable for their investment behaviors,which is a response to the judicial practice of the "buyer's ego" concept.At the same time,because securities companies' breach of the obligation of appropriateness is mostly based on industry self-discipline and regulation or administrative supervision of the regulatory agency,when an investor exercises relief with a securities company's right to request a breach of statutory or contractual obligations,The behavior of securities companies violated the regulations,but did not violate the mandatory provisions of the law,which was a deficiency in the legislative system.It is difficult for investors to directly protect their legitimate rights and interests in accordance with the provisions of regulatory documents due to the insufficient level of effectiveness of the investor suitability system.The author has been searching high-level laws,hoping to find the legal basis.When the securities company violates the obligation of appropriateness,it can vigorously pursue the civil liability of the securities company and bear the compensation liability to investors.At present,the amendment of the Securities Law in 2019 is expected to make new breakthroughs in legislation,which is the gospel for investors.The choice of propositions in this article aims to find a more adequate theoretical and judicial basis from the existing legal system and judicial practice,and try to find more effective judicial relief for investors.This paper is divided into two parts: the lead and the text.The lead part: Explain from the question,the research value and significance,the literature review,the main research methods,the structure of the paper and the main innovations and shortcomings of the thesis.From the background of the case,it puts forward the response of the regulatory body to the behavior of the securities company,briefly describes the court's determination of the behavior of the securities company and the determination of the causal relationship of the damage compensation,which leads to the violation of the “investor's appropriate obligation” of the securities operation institution in China's current judicial practice.The post-responsibility determination is more difficult.The text is divided into four chapters:Introduction to the Principle of Suitability: It mainly explains the theory of the suitability principle,the institutionalization of the suitability principle,and the theoretical basis for the suitability of the suitability principle.The author starts from the connotation of the investor and the principle of appropriateness,and analyzes the existence of the principle of appropriateness.The realistic basis is that the two issues of "administrative supervision" and "investor appropriateness obligations" need to be solved."Applicable scope","applicable objects","contents of obligations",etc.,focusing on the theoretical basis of the institutionalization of the principle of appropriateness from "faith obligations","contract obligations",and "good faith obligations".This theoretical basis has obstacles in the institutionalization of the principle of appropriateness and judicial practice.If it is written into a high-level legal system as a legal obligation,this obstacle will be greatly reduced.Chapter 2: Theoretical analysis of the civil liability of securities companies for breach of the obligation of appropriateness: It mainly focuses on the attributes of the "appropriateness obligation" and the civil liability of breach of the "appropriateness obligation" of the securities company.The author focuses on the obligation framework of "understanding products-understanding customers-products and investors are suitable",examining the key content of "appropriateness obligations" in China and major foreign countries,and analyzing violations of "appropriateness obligations".There may be several legal consequences,that is,three types of civil liabilities: "responsibility for contracting negligence","responsibility for breach of contract" and "liability for tort".The fall point is based on the logic of "statutory obligations".A more effective remedy is a claim based on infringement.Chapter ?: Infringement Actions by Securities Companies for Violating the Obligation of Suitability: Analyze the theories of the identification of tort liability and the presumption of causality for securities companies' violation of the "appropriateness obligation",and discuss and demonstrate the presumption of causality in the securities company.Judicial application in sexual infringement suits.Taking the infringement action as the core and the four constituent elements of the infringement,discussing the nature of the violation of the obligation of appropriateness,can be attributed to securities infringement.Based on the judicial application of presumed causality in securities torts,the judicial application of presumed causality in violation of the obligation of appropriateness is explored.The Commercial Trial Opinion of the Supreme Court of China,combined with the presumed causality in the United States,puts forward "transaction causality." The concept of "relationship",the application of this concept in "securities tort" litigation,reduces the difficulty for investors to prove from the perspective of investor protection.Chapter 4: Improve the legal system of appropriateness norms.In light of judicial practice,in view of the shortcomings of China's existing system of appropriateness regulations,there are only two legal securities laws currently in force in our country that lack the obligation of appropriateness regulations.Therefore,it mainly analyzes the department regulations and regulatory documents under the China Banking Regulatory Commission and the Securities Regulatory Commission system,because the effectiveness is not sufficient,and there is no deterrent effect on securities companies.At the same time,because it places more emphasis on the supervision and management of securities companies by regulators,it ignores the protection of investors.It is also based on this management concept of administrative supervision.The regulations on administrative responsibilities of departmental regulations and normative documents are specific and clear,and have relatively strong operability.On the contrary,the provisions on civil liability are relatively vague and lack operability,making it almost impossible for investors to directly defend their rights on this basis.Based on the above shortcomings,the author puts forward perfect suggestions from the legislative level,the system positioning level and the civil liability relief level.It is hoped that the problems of the causal relationship presumption between the breach of the obligation of appropriateness of the securities company and the loss of investors and the civil liability of the breach of the obligation of the appropriateness of the securities company can be solved.Concluding remarks: A summary of the full text.