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Operational Regulations Governing Securities Firms Recommending Trades in Securities to Customers  CH

Amended Date: 2017.11.22 
Categories: Market Supervision > Regulation of Securities Firms

Title: Regulations Governing Securities Firms Recommending Trades in Securities to Customers(2003.10.01)
Article 2 A securities firm shall not recommend any trade in securities to unspecified multiple persons.
When recommending a trade in securities to a specific customer, a securities firm shall be fully aware of and evaluate the customer's investment knowledge, investment experience, financial status, and degree of investment risk tolerance.
Before recommending a trade in securities, a securities firm shall first appoint a responsible associated person to explain to the customer the potential risks of trading securities, and then sign a recommendation contract with the customer.
This Corporation shall separately prescribe the content that must be included in the recommendation contract.
When recommending trades in securities to domestic and foreign institutional investors as set forth in paragraph 6, a securities firm shall not be subject to the restrictions in paragraph 3.
The terms "domestic institutional investor" and "foreign institutional investors" as used in the previous paragraph include domestic and foreign banks, insurance companies, fund management companies, securities firms, government investment institutions, government funds, mutual funds, unit trusts, investment trusts, trust enterprises, and academic or charitable institutions.