The structure of disclosure duty and the suitability principal in Japan Financial Consumer Protection Regulation
Date Issued
2015
Date
2015
Author(s)
Lin, Yi-Hsien
Abstract
For protecting the investors in a transaction of financial instruments, the ”Financial Consumer Protection Law” was enacted at 30th Dec 2011. The constituent elements of “disclosure duty” and “suitability principal” which financial institution is required in financial transaction is expressly described in this law, and the liability for damages of failing to perform “disclosure duty” and of breach of “suitability principal” is also included in this law. In early practice of law in our country, it’s hard to imagine that financial institutions are liable for their defective conduct in a financial transaction which cause damages to investors, but this conception is not comply with the purpose for protecting investors. After the enactment of the ”Financial Consumer Protection Law”, it’s still doubtful that the implement of the law, especially about the liability for damages of failing to perform “disclosure duty” and of breach of “suitability principal”, will achieve the respected effect of the statute in practice of law in our country. Observing the law of Japan, which is adopting the “disclosure duty” and “suitability principal” that financial institution is required, it has developed, from accumulation of practice and theory of law for a long time, criteria about the constituent elements of “disclosure duty” and “suitability principal”, and criteria about other extended duties such as “duty to advice” or “duty of consumer intelligence gathering”, and even criteria about the comparative negligence of investors. All about that may be a good reference for Taiwan. In order to construct the complete system about liability for damages of failing to perform “disclosure duty” and of breach of “suitability principal”, this article focused on the comparison with the regulations, theory and the conception in practicing law about “disclosure duty” and “suitability principal” in Japan. And this article also pointed out the controversial issues in Japan, for improving the law in our country to be accordant with the purpose of protecting financial consumers.
Subjects
financial instruments
disclosure duty
suitability principal
duty to advice
duty of consumer intelligence gathering
comparative negligence
Type
thesis