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LI Ting
Renmin University of China Law School
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JUN 2018 ARTICLE: AN EXAMINATION OF RETAIL CLIENTS’ INVESTOR SUITABILITY RULES IN THE COBS AND THE LESSONS FOR CHINA


        Abstract: Nowadays, the complexity of financial products makes it difficult for retailclients to identify investment risks, and there is an increasing tendency for firms,stipulated by the maximum profits, to recommend or enter into unsuitable transactions toor for retail clients while providing services of investment advice and portfoliomanagement, which causes great losses to a significant number of investors. So, in thecontemporary society, the investor suitability rules through which retail clients canpurchase suitable financial products are the indispensable legal basis of investorprotection. Currently, the regulations concerning investor suitability management inChina have several problems, including the chaotic legal system, low effectiveness leveland defective contents, which may make it difficult for suitability to be applied in justiceand managed effectively. Since the UK’s investor suitability rules in the Conduct ofBusiness Sourcebook that apply to retail clients whose contents include requirements ofobtaining retail clients’ information, requirements of information to be provided to retailclients and criteria of assessing suitability are clear and comprehensive, the authorsbelieve that the UK’s experiences can provide a great enlightenment for China to betterinvestor suitability management rules, including integrating legal documents andoptimizing effectiveness level, rationalizing application scope, adding criteria ofassessing suitability and revising specific clauses.

Full Text AN EXAMINATION OF RETAIL CLIENTS’ INVESTOR SUITABILITY RULES IN THE COBS AND THE LESSONS FOR CHINA.pdf

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