On November 8,2019,the Supreme People's Court issued the"Minutes of the National Conference on Civil and Commercial Trial Work of Courts"(hereinafter referred to as the"Minutes").The Minutes of the Meeting has five parts that provide guidance on the hot and difficult issues in the current financial case trial work,as well as new requirements for financial industry practitioners and lawyers engaged in financial business to conduct their work in the future.However,it is recommended that some concepts in the financial field be further clarified in the Minutes of the Meeting in order to cause unnecessary controversy.

What exactly is"financial consumer"?

The title of the fifth part of the Minutes of the Meeting is"Trial of Disputes over the Protection of the Rights and Interests of Financial Consumers",but the author does not have a definition of financial consumers.

On December 14,2016,the People's Bank of China issued the"Implementation Measures of the People's Bank of China for the Protection of the Rights and Interests of Financial Consumers"(hereinafter referred to as the"Implementation Measures"),which defines the concept of financial consumers for the first time,namely,natural persons who purchase and use financial products and services provided by financial institutions.This is currently the only definition of the concept of"financial consumer".However,the scope of application of the implementation measures is unclear.The implementation measures provide that"banking financial institutions established in accordance with the law within the People's Republic of China to provide financial products and services to financial consumers,other financial institutions that provide cross market and cross industry financial products and services,and non bank payment institutions shall apply to these measures.""Credit reporting institutions are subject to these measures by reference."However,the recipients of these measures are the Shanghai headquarters and branches of the People's Bank of China,as well as"commercial banks,joint-stock commercial banks,and Postal Savings Bank of China in various countries;China UnionPay",which does not include banking,insurance,securities regulatory authorities,and non banking financial institutions.In practice,these institutions have not been found to apply this implementation measure.In the various regulations and self-regulatory standards on appropriateness management in the securities and banking and insurance regulatory system issued after the implementation of the Measures,the name"financial consumer"is not used,but the names of"investor"and"trustee"(trust business)are used.

The"investor"or"client"specified by the competent departments of the financial industry in the relevant appropriateness management system is significantly different from the"financial consumer"specified in the Measures for the Implementation of the People's Bank of China on the Protection of the Rights and Interests of Financial Consumers.That is,according to the regulations of the People's Bank of China,"financial consumer"can only be individuals,while"investor"or"client"can be individuals or institutions,It can also be the financial product itself.It can be seen that the concept of"financial consumer"has not been adopted by the financial industry authorities.

So,is the"financial consumer"mentioned in the Minutes of the Meeting the"financial consumer"specified in the"Measures for the Implementation of the People's Bank of China on the Protection of the Rights and Interests of Financial Consumers"?It doesn't seem to be either.

First of all,the concept of"financial consumer"is not defined in the Minutes of the Meeting,nor is the Implementation Measures of the People's Bank of China on the Protection of the Rights and Interests of Financial Consumers cited.Secondly,from the content of Part V of the Minutes of the Meeting,it seems that the possibility of institutions serving as"financial consumers"is not explicitly excluded,but the"financial consumers"in this implementation measure are clearly individuals.Once again,the implementation method explicitly states that the"Consumer Rights Protection Law"is one of its legal bases.Based on this,it is inferred that the"Consumer Rights Protection Law"should be applicable to issues related to the protection of financial consumers'rights and interests,but the second paragraph of Article 77 of the"Minutes of the Meeting"clearly stipulates that,"The people's court does not support a financial consumer who claims that the seller's institution should bear punitive liability for compensation in accordance with Article 55 of the Consumer Rights Protection Law on the grounds that the seller's institution has fraudulent behavior due to purchasing high-risk financial products or receiving services for participating in high-risk investment activities.",The term"financial consumer"in the Minutes of the Meeting is not the same as the term"financial consumer"in the Implementation Measures for the Protection of the Rights and Interests of Financial Consumers of the People's Bank of China.

At this point,the author understands that the concept of"financial consumer"introduced by the Supreme People's Court in the Minutes of the Meeting is different from the concept of"financial consumer"in the Measures for the Implementation of the People's Bank of China on the Protection of the Rights and Interests of Financial Consumers,or from the concept of"investor"or"client"used by the financial industry regulatory authorities.There are both connections and differences,and it is a new concept.The reason for introducing this concept is,on the one hand,related to the current environment that emphasizes the protection of the rights and interests of investors,especially individual investors;On the other hand,it may also be that the judicial authorities have failed to correctly understand the difference between the two concepts of"consumer"and"investor"in the financial field.

After the implementation of the"Consumer Rights Protection Law",in China,consumers have become a term with specific meanings,that is,individuals who need to purchase,use goods,or receive services for daily consumption are consumers.The use of the concept of"consumer"in the field of"life needs"beyond the provisions of the Consumer Rights Protection Law must be cautious and have a connection with"life needs",otherwise it should be clearly redefined.We acknowledge that there are some consumer behaviors in the financial field,such as the payment behavior mentioned in the"Implementation Measures for the Protection of Financial Consumer Rights and Interests of the People's Bank of China",but with these few exceptions,other behaviors of purchasing financial products or receiving financial services are in principle considered as investment behaviors,whether in the perspective of industry authorities or in other administrative departments such as statistical departments and academia,That's all true.Without a definition and explanation,it is best not to introduce controversial new concepts hastily.Otherwise,once a case arises,it will cause difficulties in various aspects such as the application of the law,the allocation of the burden of proof,and the calculation of compensation standards.Since the Minutes of the Meeting have collectively referred to financial product issuers,sellers,and financial service providers as sellers,it may be simpler and less controversial to refer to the other party as a buyer.

Note 1:On November 16,2015,the General Office of the State Council issued the Guiding Opinions on Strengthening the Protection of the Rights and Interests of Financial Consumers.This is the earliest normative document on the protection of the rights and interests of"financial consumers"in China,but the guidance also does not define"financial consumers",nor does it mention the relationship between the protection of the rights and interests of"financial consumers"and the Consumer Rights Protection Law.

Note 2:On February 21,2017,the China Securities Regulatory Commission issued the"Management Measures for the Suitability of Securities and Futures Investors";On June 28,2017,the China Fund Industry Association issued the"Implementation Guidelines for the Appropriateness Management of Fund Raising Institutional Investors(for Trial Implementation)";On June 29,2017,the China Securities Association issued the"Implementation Guidelines for the Appropriateness Management of Institutional Investors in Securities Operations(for Trial Implementation)".The aforementioned provisions shall come into force as of July 1,2017.On November 17,2017,the China Futures Industry Association issued the"Implementation Guidelines for the Suitability Management of Institutional Investors in Futures Operations(for Trial Implementation)".Both use the term"investor".

Note 3:On September 16,2018,the China Trust Industry Association issued the"Due Diligence Guidelines for Fiduciary Responsibilities of Trust Companies",which contains the content of appropriateness management,but neither uses the concept of"consumer"nor the concept of"investor".Instead,it follows the provisions of the"Trust Law"and uses the terms"trustor"and"beneficiary".

Note 4:On September 28,2018,the China Banking and Insurance Regulatory Commission issued the"Measures for the Supervision and Administration of Financial Services of Commercial Banks",replacing a series of previous regulations such as the"Interim Measures for the Management of Personal Financial Services of Commercial Banks"and the"Guidelines for the Risk Management of Personal Financial Services of Commercial Banks",in which the term"investor"is used.

Note 5:The"Guiding Opinions on Regulating the Asset Management Business of Financial Institutions"jointly issued by the People's Bank of China,China Banking and Insurance Regulatory Commission,China Securities Regulatory Commission,and the State Administration of Foreign Exchange on April 27,2018 mentions the need to"strengthen the protection of the rights and interests of financial consumers"in the first basic principle,while other provisions either use the term"client"or use the term"investor",and the term"financial consumer"only appears once.

Please look forward to the author's follow-up professional research:"Which"financial consumers"should be protected?"

(This article is translated by software translator for reference only.)