The China Banking and Insurance Regulatory Commission issued the Measures on Product Suitability Management of Financial Institutions, setting out suitability management obligations aimed at strengthening financial consumer protection. The Measures take effect from 1 February 2026. The Measures comprise five chapters and 49 articles and require financial institutions to understand both products and customers, and to sell suitable products through appropriate channels to suitable customers. For investment products, institutions must assign and dynamically manage product risk ratings, classify investors as professional or ordinary, and apply enhanced protections for ordinary investors including stronger risk tolerance assessments, fuller disclosure, and risk warnings. For insurance products, institutions must apply classification and tiered management aligned with tiered insurance sales qualifications, and conduct needs analysis and assessments of policyholders’ ability to pay; selling investment-linked insurance and similar products also triggers product risk rating and policyholder risk tolerance assessment requirements. Breaches can result in supervisory measures and administrative penalties imposed on institutions and responsible individuals by the regulator and its local offices.

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