Purchasing Securities through Brokerage: Who is Responsible for Losses?
Who is Responsible When Losing Money Through Brokerage in Securities Trading?
Based on Clause 29, Article 4 of the Securities Law 2019:
Securities brokerage refers to the act of intermediating the purchase and sale of securities on behalf of clients.
Article 5 of the Securities Law 2019 stipulates the principles of activities related to securities and the securities market as follows:
Respect for property rights and other rights related to assets in securities activities and the securities market; the right to free transactions, investment, business, and provision of securities services by organizations and individuals.
Fairness, publicity, transparency.
Protection of the lawful rights and interests of investors.
Self-responsibility for risks.
Clause 86 of the Securities Law 2019 outlines the licensed services that securities companies can perform as follows:
a) Accepting the mandate to manage personal investor's securities trading accounts; distributing or acting as the distribution agent for securities; managing securities trading accounts; providing the service of managing the list of securities holders for other enterprises;
b) Providing online securities trading services; providing or cooperating with credit institutions to offer services for clients to borrow money for securities purchase or providing securities lending services; providing or cooperating with credit institutions to offer advance cash services for securities sales; custody of securities; clearing and settling securities; and services on the derivatives securities market.
- Securities companies licensed to conduct proprietary trading can trade securities on proprietary trading accounts and are allowed to invest, contribute capital, issue, and offer financial products.
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Therefore, securities brokerage is merely an intermediary activity entrusted with managing and advising investors in securities. In principle, investors must take responsibility for their own risks. Hence, you must bear the responsibility for any financial losses incurred by yourself.
Business Operations of Securities Companies?
Pursuant to Article 72 of the Securities Law 2019:
- Securities companies are licensed to perform one, several, or all of the following business operations:
a) Securities brokerage;
b) Proprietary trading of securities;
c) Securities underwriting;
d) Securities investment consulting.
Securities companies are only permitted to carry out proprietary trading operations when they are licensed to perform securities brokerage operations.
Securities companies are only permitted to carry out securities underwriting operations when they are licensed to perform proprietary trading operations.
Respectfully!
