Research On The Supervision Issues Of Robo-Advisor

At the beginning of the 21 st century,with the rapid development of technologies such as artificial intelligence and big data,financial technology emerged,injecting vitality into the financial field.Robo-advisor is a new thing generated by the integration of finance and technology,which has advantages that traditional manual investment consulting does not have such as inclusiveness and intelligence.Since its entry into China,robo-advisor has quickly attracted the attention of thousands of investors with their unique advantages.However,legal regulation often lags behind the development and changes of reality,especially in the robo-advisor industry.Under the current legal framework and regulatory system in China,the supervision of robo-adviser raises a number of issues that do not protect the rights and interests of investors and ensure order in the financial market.This paper mainly uses literature research,normative analysis and comparative analysis to conduct the research,except for the introduction,the second,third and fourth chapters are as follows:The second chapter is an overview of robo-advisor.First,clarify the definition and business boundaries of robo-advisor by studying national regulations.Secondly,explain its operational process and advantages.Finally,it elaborates on the current regulatory situation and principles of robo-advisor in China,thereby discussing the necessity of implementing regulatory measures on them.As far as the definition of robo-advisor is concerned,the theoretical community has not yet formed a unified view.Some scholars believe that although robo-advisor is a financial technology that integrates emerging technologies,it still provides investment advisory services.Some scholars believe that robo-advisor has both investment advice and asset management functions.This paper argues that robo-advisor relies on artificial intelligence,big data and other technologies to provide investors with investment advice and asset management services based on analysis of information such as investors’ income profile and risk appetite.The third chapter is about the problems existing in the supervision of robo-advisor in China.First,the cross-border nature of the robo-advisor business is not compatible with separate industry supervision.Secondly,due to the conflict between the licensing system and the suspension of issuance,as well as the obstruction of the discretionary model,robo-advisor faces compliance challenges.Next,in terms of investor protection,there are problems of inadequate investor suitability assessment,lack of clarity on the subject of responsibility,lack of equivalence of rights and obligations arising from electronic contracts and insufficient professional education for investors.Thirdly,due to the fact that the algorithm belongs to a trade secret,which conflicts with the transparency required by regulatory principles,it causes difficulties in algorithm regulation,and traditional regulatory measures are not sufficient to address the complexity of the algorithm.Finally,there is a lack of market exit mechanism for robo-advisor in China.The fourth chapter is about the improvement of China’s robo-advisor regulatory system.First of all,China’s regulatory authorities should establish a collaborative regulatory system to implement penetrating regulation,and the government can cooperate and jointly supervise with industry self-regulatory organizations.Secondly,we should improve the licensing system and gradually liberalize discretionary power to promote the legalization of robo-advisor.Next,in terms of investor protection,it is necessary to standardize the evaluation of investor suitability,clarify the subject of responsibility,standardize electronic contracts,and strengthen investor education.Thirdly,in terms of algorithmic regulation,operators should strengthen their algorithmic disclosure obligations,and they can learn from the UK and implement the "regulatory sandbox" model.Finally,it is necessary to establish a market exit mechanism for robo-advisor in order to improve China’s regulatory system for robo-advisor.