China's National Financial Regulatory Administration (NFRA) has published draft measures on product suitability management and opened them for public consultation, setting out end-to-end obligations for financial institutions to match products to customers as part of a broader push to strengthen financial consumer protection. The draft, structured in six chapters and 50 articles, requires institutions to understand both the product and the customer and to provide suitability matching opinions when customers purchase products. For investment products, institutions would need to classify and dynamically manage product risk levels, distinguish between professional and ordinary investors, and apply enhanced protections for ordinary investors including risk tolerance assessments, robust disclosure and risk warnings; private placement products would need to be sold privately and only to qualified investors with relevant risk identification and risk-bearing capacity. For insurance products, the measures would introduce classification and tiered management aligned with tiered management of insurance sales qualifications, and require needs analysis and affordability assessments for policyholders; selling unit-linked and similar products would also trigger product risk rating and policyholder risk tolerance assessment requirements. NFRA and its local offices would be able to take supervisory measures and impose administrative penalties on institutions and responsible individuals for breaches. Following feedback, NFRA plans to revise and finalise the measures and publish them for implementation at an appropriate time.

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