On Mar. 28, CHI NFRA proposed measures for suitability management.
CHI NFRA draftedMeasures for the suitability management of financial institution products, to establish clear obligations for FIs re product suitability management.
Draft Measures
FIs are required to understand both their products and their clients, make appropriate recommendations, and sell only those products that match the customer’s profile.
For investment products, financial institutions must assign risk levels, manage them dynamically, and distinguish between professional and ordinary investors.
Ordinary investors require safeguards such as risk assessments and disclosures, while private placement products must be sold to qualified, risk-aware investors as required.
For insurance products, institutions must implement tiered management systems, which align with sales qualification levels, and assess customer needs, affordability.
Measures enable CHI NFRA and its branches to take supervisory actions and impose administrative penalties on institutions and personnel that violate suitability rules.
Consultation Period
The comment period of this consultation ends on Apr. 28, 2025.
