Legal Regulation of “Retail” Investmentsin Financial Markets

Abstract

The subjects of the research are the state of legal regulation of the protection of the rights of private investors in financial markets, the construction of legal mechanisms for the protection of retail investors, contractual and judicial practice in the field of retail investments, the impact of the quality of legal protection on improving the quality of life and the formation of human capital. The objectives of the work are to identify and establish the most unfair practices in the contractual consolidation of relations between professional financial intermediaries and retail investors in the financial markets, to determine the optimal ways to protect private investors and adapt existing legal means to improve the quality of protection of the rights of private investors. In the course of the study, the most dangerous norms found in the contractual documentation of professional financial intermediaries were identified, such as the imposition of risks on the retail investor; the release of the intermediary from any liability (including limitation of the amount of liability). The most unfair practices related to the limitation of liability of intermediaries have been identified. It is concluded that the best way to protect retail investors in private law is to apply the doctrine of fiduciary duties of a financial intermediary, including by establishing certain presumptions that encourage him to comply with «trust» obligations, as well as by changing procedural approaches to the consideration of litigation involving retail investors.