Financial Law of the People's Republic of China (Draft) Article 53: The financial management department of the State Council shall improve the system and mechanism for the protection of financial consumers and investors' rights and interests, strengthen education for financial consumers and investors, and increase protection efforts.
What do &#34;financial consumers and investors&#34; refer to here? What is the difference between financial consumers and investors?
These two terms are often seen in various media; are they completely synonymous?
Clearly not. Let's first look at financial consumers. The concept of financial consumers originates from &#34;consumers.&#34; The essence of &#34;consumers&#34; is natural persons who purchase goods or receive services for the purpose of living, consumption, or property management. Their characteristic is being in a position of information disadvantage and unequal transaction status, requiring preferential protection. Based on this, the term is limited to the &#34;financial field,&#34; meaning that all natural persons who purchase financial products or receive financial services are considered financial consumers, and investors (especially individual investors) are also an important part of this category.
Investors, as a group that invests funds to obtain returns, include individual investors who purchase various financial products such as stocks, funds, wealth management products, trusts, and gold. Essentially, they are also receiving investment services provided by financial institutions, which fully aligns with the definition of financial consumers.
Therefore, Professor Zhou tends to believe that financial consumers is a broader concept that encompasses all individuals participating in financial activities, while investors are an important subset of financial consumers. This is also why, in the 2023 financial reform plan of the Party and the state, the National Financial Regulatory Administration is responsible for the protection of financial consumers' rights and interests.
Note that there is no parallel listing of investor protection and financial consumer rights protection here, indicating that at the national level, financial consumers are still regarded as a broader concept, implicitly including investor protection. The subsequent Document No. 1 of 2024, &#34;Announcement on the Work Arrangement Related to the Protection of Financial Consumers' Rights and Interests by the National Financial Regulatory Administration, the People's Bank of China, and the China Securities Regulatory Commission,&#34; also supports this idea.
However, the question arises: why are both listed in parallel in the 2026 &#34;Financial Law (Draft)&#34;?
Professor Zhou believes there are several reasons for this, and I will briefly share my understanding.
First, while it makes sense legally, it is somewhat difficult to reconcile in literal terms.
From a literal perspective, &#34;financial consumers&#34; contains the word &#34;consumption,&#34; meaning obtaining corresponding financial products or services through payment of a certain price, which highly aligns with many financial services we handle daily.
For example, the fees paid when processing a bank transfer are for obtaining the service of fund transfer; the interest paid when applying for a personal housing loan is for obtaining the right to use funds to meet housing needs; the fees paid when processing credit card installments are for enjoying the convenience of fund turnover. These scenarios reflect the essence of &#34;consumption,&#34; where a little money is spent to obtain corresponding financial services.
At the same time, many financial behaviors in reality are not simply &#34;paying for services,&#34; but rather align with &#34;investment&#34; attributes, such as purchasing bank wealth management products, public funds, and stock trading. Although participants also pay certain fees, their purpose is to obtain investment returns, and they certainly hope that the investment returns will exceed the fees paid
In this context, summarizing with the term &#34;consumption&#34; seems somewhat forced, especially for the vast number of retail investors and mutual fund investors. Over the years, many have invested funds but not only failed to achieve expected returns, but also experienced significant losses, often joking that they &#34;didn't come to invest, but to consume.&#34; As a result, some people simply complain that they seem more suited to being described as &#34;financial consumers.&#34;
After all, from the perspective of traditional Chinese characters, &#34;consumption&#34; more refers to &#34;consuming, paying to exchange for use value,&#34; while investment emphasizes &#34;input to obtain value-added returns.&#34; There is a clear difference in orientation between the two. Therefore, using the term &#34;financial consumers&#34; to literally encompass all types of financial activities in our country, balancing both consumption and investment with their different attributes, indeed presents considerable difficulty and may not fully align with the actual experiences and perceptions of all participants.
Secondly, the historical development and legal foundations of the two are also different.
Let's first discuss the concept of &#34;investors.&#34; The notion of investor protection can be considered a &#34;veteran&#34; in this field, as it has appeared early on in the Securities Law and accompanying important documents.
The first Securities Law, passed by the sixth meeting of the Ninth National People's Congress Standing Committee on December 29, 1998, explicitly listed &#34;protecting the legitimate rights and interests of investors&#34; as the legislative purpose in Article 1 of the General Principles. This was the first time &#34;investor protection&#34; was formally established in the form of national basic law, laying the fundamental position of this concept in the capital market system.
During the revision of the Securities Law in 2005, the relevant institutional arrangements for investor protection were further strengthened, adding provisions for the Securities Investor Protection Fund and improving the civil compensation mechanism, marking an important step from principle-based statements to concrete institutional implementation of investor protection.
The revised Securities Law on December 28, 2019, even more historically added Chapter Six &#34;Investor Protection&#34; as a dedicated chapter, constructing systematic protection rules around investor suitability management, pre-compensation, solicitation of voting rights, and representative litigation, marking the comprehensive legalization and systematization of investor protection, and making this concept clearer and more complete at the legal level.
On the other hand, the legal source of the term financial consumer protection was not confirmed until the revision of the Consumer Rights Protection Law of the People's Republic of China in 2013, when Article 28 explicitly included &#34;financial services such as securities, insurance, and banking&#34; within its scope of adjustment, legally confirming that individuals receiving financial services fall under the category of &#34;consumers.&#34;
Subsequently, in 2015, the &#34;Guiding Opinions on Strengthening the Protection of Financial Consumers' Rights and Interests&#34; issued by the General Office of the State Council was the first national-level programmatic document to systematically and comprehensively establish &#34;financial consumer rights protection&#34; as an important part of national financial work. It first systematically defined eight basic rights of financial consumers: the right to property security, the right to know, the right to choose independently, the right to fair trading, the right to seek compensation according to law, the right to education, the right to be respected, and the right to information security. It required financial institutions to incorporate protection into corporate governance, implement suitability systems, and standardize business behavior; clarified the division of labor between financial regulatory departments and local governments, and established mechanisms for regulatory coordination, diversified dispute resolution, and financial knowledge dissemination
Therefore, in comparison between the two, investor protection emerged earlier, with a more complete legal foundation, while the protection of financial consumers' rights appeared relatively later, with a somewhat weaker legal basis. The regulatory affiliations of the two are also different; one is a concept consistently used by the China Securities Regulatory Commission, while the other is a concept used by the People's Bank of China and the National Financial Regulatory Administration (formerly the China Banking and Insurance Regulatory Commission). It is somewhat difficult to completely replace a concept that emerged earlier than yours, has a more complete legal foundation, and involves a completely different level of risk with financial consumer rights protection.
Thus, the legislators listed financial consumers alongside investors, I believe the original intention is to acknowledge the differences in connotation and attributes between the two. Since it is impossible to use one concept to encompass all financial behaviors, it is better to clearly distinguish and comprehensively cover them, which is undoubtedly a good thing for the general public. Whether it is daily payment, loan, credit card, and other consumer financial services, or participating in wealth management, funds, stocks, gold, and other investment financial activities, the legitimate rights and interests of the public can receive targeted protection, avoiding the neglect of consumer rights and preventing the dilemma of investment disputes being unregulated, truly achieving comprehensive and thorough rights protection.
In the future, the division of labor for the protection of financial consumers and investors' rights among China's three central financial regulatory agencies will be as follows:
The National Financial Regulatory Administration will serve as the coordinating body, uniformly formulating consumer protection plans, systems, and standards for the entire industry, conducting financial education, and coordinating dispute resolution and complaint handling. It is responsible for financial consumer protection in areas such as banking (including consumer finance companies), insurance, and trust (as specified separately in the Financial Law).
The People's Bank of China focuses on specific areas of consumer protection, responsible for the financial consumer rights protection of non-bank payment institutions and credit reporting agencies.
The China Securities Regulatory Commission is dedicated to capital market investor protection, implementing comprehensive regulation and investor protection in the fields of securities, funds, and futures.
Heavy Recommendation
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Article 53 of the "Financial Law (Draft)" mentions the protection of the rights and interests of financial consumers and investors. Financial consumers refer to individuals who purchase financial products or receive financial services in the financial sector, typically in a position of information disadvantage and in need of protection. Investors are the group that invests funds to obtain returns, and individual investors are also part of financial consumers. Financial consumers is a broader concept that encompasses investors. The National Financial Regulatory Administration is responsible for the protection of financial consumers' rights and interests, but in the 2026 draft, both are listed side by side, possibly due to compatibility issues between legal and literal meanings

What do "financial consumers" and "investor rights protection" mentioned in the "Financial Law" refer to?