Research On The Best Execution Duty Of Robo-Advisors’ Provider

Robo-advisors is a financial technology emerging under the tide of big data and cloud computing.The characteristics of low investment threshold and low service cost enable small and medium-sized investors lacking investment experience to enjoy professional investment services.However,Robo-advisors is running in a huge algorithm "black box",which makes it difficult to protect the legitimate rights and interests of investors in the face of serious information asymmetry.Intelligence from operators and their customers through intelligent shots of the service agreement to establish a relationship between rights and obligations,but in the present service agreement in the form of electronic contract,the customer did not adjust the terms of the contract regulation operators improper behavior of the space,so the intelligent interest service agreement alone cannot throw from operators to form effective constraint on intelligence.The serious information asymmetry between robo-advisors provider and investors makes them prone to adverse selection and moral hazard.By examining the existing codes of conduct of robo-advisors provider in China,there are many shortcomings,such as the low level of legal norms,the lack of specific standards of care,and the inability to judge how to serve the best interests of investors.The introduction of the best execution duty not only provides a new way to solve the principal-agent problem between operators and customers,but also can effectivelyprevent the infringement of interest conflicts on investors’ interests.Therefore,starting from the essence of trust relationship between the operator and the investor,the source of optimal execution obligation is derived from the existence of trust relationship.The United States and the European Union the best execution of compulsory standard although based on multiple competitive market,but the selection of investment place,consider the execution speed and cost and reasonable factors such as disclosure of information is worthy of reference for our country on this basis,the intelligent vote from operators in China the establishment of the best execution duty should first clear the obligation of best execution basic content and form,and when the operator failed to fulfill their obligation to perform best when the specification of the content,and shall bear the corresponding civil liability,or be liable for punitive damages.The full text is mainly divided into the following three chapters:The first chapter is under the system of financial industries managed and supervised respectively in our country,according to the intelligent cast from different business model generalizes the current intelligent behavior norms related to the interest,points out the shortages of the current specification,including legal status is lower against judicial application,basic law lacks specific industry standards and financial sector regulations and self-discipline rules and not tilt to the investors,is not conducive to protect the legitimate rights and interests of small and medium-sized investors.By analyzing the causes of the defects of the legal norms,the author makes a realistic foundation for the introduction of the best execution duty.The second chapter aims to demonstrate the legitimacy and necessity of introducing the best execution duty.Firstly,the paper introduces the origin of the best execution duty,including the trust relation theory and the signboard theory.Secondly,it is necessary to introduce the realistic value argumentation of the best performing obligation.Best execution duty to solve the problem of the traditional "entrust-agent" to provide a new path,can effectively mitigate conflicts of interest,for the interests of the investors in the end,through the introduction of the best performing obligations of the United States and the European Union rules,to our country theestablishment of the best performing obligations to provide useful reference,including the construction of a multi-level system,perfecting the information disclosure system and under the background of technology innovation should improve the industry standard.The third chapter is the prospect of the localization construction of the best execution duty of robo-advisors provider in China.The premise of constructing the best execution duty is to confirm the legal relationship between the intelligent investment service operator and the customer as the trust relationship and identify the source of the best execution duty.This is followed by the definition of the best execution duty of t robo-advisors provider,which includes tracking and evaluating the execution algorithm to ensure the effectiveness of the algorithm and disclosing direct and indirect conflicts of interest.On this basis,if the operator fails to perform the best execution duty,it should bear the corresponding civil liability,so as to strengthen the strength of investor protection.