Kingsford Smith, Dimity --- "Financial Services Regulation and the Investor as Consumer" [2010] ELECD 180; in Howells, Geraint; Ramsay, Iain; Wihelmsson, Thomas; Kraft, David (eds), "Handbook of Research on International Consumer Law" (Edward Elgar Publishing, 2010)

Book Title: Handbook of Research on International Consumer Law

Editor(s): Howells, Geraint; Ramsay, Iain; Wihelmsson, Thomas; Kraft, David

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847201287

Section: Chapter 15

Section Title: Financial Services Regulation and the Investor as Consumer

Author(s): Kingsford Smith, Dimity

Number of pages: 51

Extract:

15. Financial services regulation and the
investor as consumer
Dimity Kingsford Smith*



1. Introduction

The day trader seems to live in the space between the categories of professional and
non-professional market participants. In recent years, regulators in different juris-
dictions have invoked distinctions between the rules that apply in the context of
wholesale market transactions and those that apply in the context of retail market
transactions, or between persons and firms who can be relied upon to look after their
own interests and those who cannot.1

This chapter is a survey of the main issues and the prominent literature emerg-
ing on the regulation of retail investors as consumers. But as this quote suggests,
it is not a simple matter to identify the investor, let alone what it means to say
the investor is a `consumer'. The two ideas are not equivalent, although they do
overlap. In recent years, this has been increasingly true. The idea of the `finan-
cial consumer` or `retail' investor has gained greater definition through legisla-
tive provision and market practice. But as the quote suggests, there are plenty of
tensions in the other direction, to persuade us to see retail investors as `sophisti-
cated' and not needing, deserving or even wanting the additional regulatory
resources required to regulate them as `financial consumers'.
At the same time as `consumer' provisions are appearing in financial
services regulation,2 more and more complex financial products are being



* The author is very grateful for the research assistance ...