Research On The Civil Liability Of Banks For Violating Suitability Obligation In The Sales Of Wealth Management Products

The provisions on commercial banks’ suitability obligation in the sale of financial products of our country are mostly found in departmental regulations or internal self-discipline norms of commercial banks.There is no provision on civil liability of commercial banks for breach of suitability obligation either at the legal level or in other regulatory documents.Due to the lack of legal provisions,the types of civil liability for breach of suitability obligation in judicial practice are still diversified.And there are obvious differences in the determination of subject,behavior and compensation which make investors feel unfair in the judgment.Therefore,it is necessary to clarify the civil liability of the bank for breaching the suitability obligation,and to set certain standards for the determination of specific liability elements.Before clarifying the types and elements of civil liability for breach of suitability obligations by banks,it is necessary to clarify the connotation and nature of suitability obligation,and clarify the legal relationship between banks and investors.First,in terms of the connotation of the suitability obligation,the connotation of the investor suitability management regime should be limited to knowing the customer,knowing the product and appropriate matching.And the suitability obligation only occurs in the sales process and should not be extended to the contract performance stage.Second,in terms of the nature of the suitability obligation,the suitability obligation is based on the theory of fiduciary duty as the jurisprudence.It is a fiduciary obligation that banks have when selling financial products.As a regulatory requirement for selling activity,suitability obligation has been identified as a statutory obligation by the new Securities Law of 2019.Therefore,its statutory nature is beyond doubt.Finally,in terms of legal relationship,no matter in the case of self-selling trading mode or agency selling trading mode,banks form a financial services legal relationship with investor in the sales process.This kind of relationship is different from the general contractual relationship and has the attribute of fiduciary relationship.There are logical flaws in regarding the breach of suitability obligations as a breach of contract obligation or pre-contract obligation.As a statutory fiduciary obligation,the suitability obligation happens in the sale process.It focuses on creating an equal trading position which is not necessarily related to the establishment of the contract.The suitability obligation is also different from the pre-contract obligation,which arises from the investors’ trust in the financial institution due to its professional competence,rather than from the expectation of the establishment of the contract.From the perspective of transaction mode,on the one hand,there is no contractual relationship between the bank and investors in the case of agency sales;on the other hand,in the case of agency sales,the bank is not a party to the financial management contract,and it cannot be determined that it has a pre-contract obligation.Considering the nature of the suitability obligation and the observation of comparative law,if a bank breaches its suitability obligation causing losses to investors,it shall be liable in tort pursuant to Article 1165 of the Civil Code.Specifically,in the subject of responsibility,in order to strengthen its main responsibility,commercial banks should be the only subject of responsibility.This will not only help investors to determine the person responsible which avoids the burden of lawsuits caused by multiple parties,but also helps to make the suitability obligation effectively work.In the identification of tort,the basic connotation of the suitability obligation should be used as the basis,and the standard of "form first,then substance" should be adopted to review the bank’s behavior.Considering the difficulty of proof for investors,the principle of presumption of fault and presumption of causation should be applied.No-fault liability may apply in cases where the investor is older,inexperienced and highly dependent on the bank.As for the damage and the scope of compensation,it should be ensured that the damage is certain when the investor claims liability,and the final loss amount should be determined by excluding the property loss caused by the systemic risk of the financial market or the issuer of the product.The scope of compensation should be the investor’s lost principal and interest.But in order to avoid "rigid payment",the interest calculation base should be limited to the lost principal.When determining the bank’s liability,the application of the rule of fault offsetting should be allowed.The application of the rule of fault offsetting is premised on the investor’s ability to recognize risks.The judgment of the investor’s ability to recognize risks should be based on the investor’s cultural and educational background,past investment experience,professional knowledge background and other factors.The proportion of investors’ liability due to fault should be limited."The buyer is responsible" is based on "the seller performs its duty".When the bank fails to perform its suitability obligation and causes loss investors,the main responsible person should be the bank.That is to say,the proportion of liability corresponding to the investor’s fault should be limited.