JOURNAL OF BEIJING UNIVERSITY OF AERONAUTICS AND A ›› 2017, Vol. 30 ›› Issue (2): 46-54.DOI: 10.13766/j.bhsk.1008-2204.2015.0462

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Development of Suitability Rule in American Securities Market and Its Enlightenment to China

LI Wenhua   

  1. Law School, Beijing Jiaotong University, Beijing 100044, China
  • Received:2015-09-25 Online:2017-03-25 Published:2017-03-31

Abstract:

Based on the Suitability Rule (made by U.S. Financial Industry Regulatory Authority and approved by U.S. Stock and Exchange Commission) and the relative regulatory notices, the paper introduces the newest development of suitability rule in U.S. securities markets since the Dodd-Frank Act was in force:the basic principles of suitability rule in U.S. securities markets, the main suitability obligations that brokers and associated persons must fulfill, and the range of disciplinary sanctions that may result from violations of those rules. Subsequently, the paper puts forth some suggestions on the perfection of China's suitability rule in securities markets by combining the enlightenment drawn from relative experiences in the U.S. and China's relative stipulations. China should enact specific regulation to stipulate its suitability rule in securities markets, systematically consummate the main suitability obligations that the brokers and the associated persons must fulfill,and perfect the stipulations about the supervision and disciplinary sanctions that may result from violations of the main suitability obligations to protect the investors in securities markets better.

Key words: U.S. Securities Market, Suitability Rule, Basic Principles, Suitability Obligations, Sanctions

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