China protects consumers of financial products

BEIJING - Chinese consumers of financial products are to get better legal protection, according to an official document released on Friday.

Protecting buyers of stocks, mutual funds, insurance and other wealth management products will raise consumer confidence, help financial stability and defend social justice, according to a guideline from the State Council, China's cabinet.

Financial institutions must fully respect consumers' independent choices and their right to know. Customer data must be kept secure and compensation must be paid in the event of wrongdoing.

Financial products will be rated by risk and complexity and according to customers preferences, perception and risk tolerance. Simple language must be used when disclosing information that may affect customers decisions and when explaining risks.

Laws and regulations will be amended to protect investors, with better market supervision and fairer competition.

China is currently awash with various kinds of financial products, and some substandard or even illegal products often cause conflicts between providers and consumers.

In 2014, the number of legal cases concerning investment and wealth management surged 616 percent, with total value reaching 54.8 billion yuan ($8.6 billion), up 451 percent from a year earlier.