How does the appropriateness principle differ from the suitability principle?

The suitability principle applies when a financial company 'recommends' a product, whereas the appropriateness principle applies when a consumer seeks to buy a product on their own without a recommendation.

Under the appropriateness principle, the financial company must ascertain the consumer's information and, if it judges the product not to be appropriate, inform the consumer of this and obtain confirmation by signature, recording or similar means. The appropriateness principle applies only to certain products, such as derivatives, derivative-linked securities and high-complexity financial investment products.