Publication date: 11.07.2024
Consumer protection in the investment sector
Investment services are an important component of the financial market, providing opportunities for capital preservation and growth. In today's world, investors have the right to protect their interests, which is ensured through legal regulation and supervision of investment market participants. Consumer protection in the investment sector includes several key aspects, which we will discuss in this article, namely: the regulatory framework, fundamental rights of investors, protection mechanisms and the procedure for appealing against violations.
The legal framework
Consumer protection in the field of investment in Ukraine is regulated by several key legal acts:
TheLaw of Ukraine "On Capital Markets and Organised Commodity Markets":
- The main law regulating activities in the capital markets establishes requirements for the provision of investment services, rights and obligations of market participants, as well as liability for violations of legislation in this area.
Law of Ukraine "On Financial Services and State Regulation of Financial Services Markets":
- Defines the legal framework for the provision of financial services, including investment services, establishes requirements for financial institutions, the procedure for licensing and control over their activities.
Law of Ukraine "On Protection of Consumer Rights":
- Defines the legal framework for the protection of the rights of consumers of financial services, establishes the rights of consumers, the obligations of service providers and the procedure for handling consumer complaints.
Law of Ukraine On Investment Activity:
- Defines the legal, economic and social framework for investment activity in Ukraine, establishes the procedure for making investments and protecting investors' rights.
Civil Code of Ukraine (CCU):
- Regulates contractual relations between investors and investment service providers, defines the rights and obligations of the parties, and mechanisms for protecting investors' rights.
Code of Administrative Offences of Ukraine (CAO):
- Provides for administrative liability for violation of the requirements of the legislation on investment services, non-compliance with the standards and rules of activity in the financial markets.
Criminal Code of Ukraine (CCU):
- Establishes criminal liability for crimes in the field of investment services, including fraud, misleading investors and other offences.
National Securities and Stock Market Commission (NSSMC):
- The regulatory body that supervises and controls the activities of capital market participants, including investment service providers.
Fundamental rights of investors
The fundamental rights of investors under Ukrainian law include:
Theright to reliable information:
- Investors have the right to receive reliable, complete and timely information about investment services, financial instruments, risks and opportunities, which allows them to make informed decisions about investments.
Theright to investment security:
- Investors have the right to protect their investments from fraud, market manipulation and other illegal actions by investment service providers.
The right toprotection from unfair competition:
- Investors have the right to protection from unfair competition, including the use of unfair methods, manipulation of information and other misleading practices.
Theright to compensation for damages:
- In the event of material or moral damage caused by the improper provision of investment services, investors have the right to compensation for damages.
Theright to apply to courts and other investor protection bodies:
- Investors have the right to apply to courts, investor protection authorities and human rights organisations to protect their rights.
Mechanisms for protecting investors' rights
Ukrainian legislation provides for several mechanisms to protect investors' rights in the field of investment:
Appeal to the investment service provider:
- In the event of violations of rights, investors have the right to apply directly to the investment service provider with a request to eliminate violations, compensate for losses or provide additional information.
Appealto investor protection authorities:
- Investors may file a complaint with the NSSMC or other competent authorities to protect their rights. The investor protection authorities review complaints, inspect the activities of investment service providers, and apply enforcement measures in case of violations.
Judicialprotection:
- Investors have the right to file lawsuits to protect their rights, including claims for damages, compensation for non-pecuniary damage, and an obligation to remedy violations.
Pre-trial dispute resolution:
- The legislation provides for the possibility of pre-trial settlement of disputes between investors and investment service providers, including mediation, arbitration and other forms of alternative dispute resolution.
Recourseto human rights organisations:
- Investors can turn to human rights organisations and lawyers to protect their rights and interests.
Procedure for appealing against violations of investors' rights
In case of violation of investors' rights in the field of investment, they have the right to appeal against such violations in accordance with the established procedure:
Appeal to the investment service provider:
- The first step is to contact the investment service provider with a request to eliminate the violations. The request may be submitted in writing, indicating the circumstances of the violation, the investor's requirements and evidence (contracts, account statements, correspondence, etc.).
Filing acomplaint with the investor protection authorities:
- If an appeal to the investment service provider has not yielded any results, the investor may file a complaint with the NSSMC or another competent authority. The complaint must contain a detailed description of the violation, evidence and the investor's claims.
Appeal to the court:
- If the complaint is not resolved, the investor has the right to go to court. The court considers the claim, hears the parties, evaluates the evidence and decides on the protection of the investor's rights. The court may order the investment service provider to remedy the violation, compensate for losses, compensate for non-pecuniary damage, etc. So, whether you need a lawyer's advice or a lawyer's advice, it doesn't matter. Legal marketplace "CONSULTANT" will help you solve any problem! All the necessary services at any time: analysis of documents, legal analysis of the situation, legal analysis of the situation, written advice, verification of documents by a lawyer, legal analysis of documents, legal opinion of a lawyer, legal opinion of a lawyer, legal analysis. Are you looking for an online lawyer or a lawyer online? Choose CONSULTANT - a lawyer is always at your side!
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