EFAMA appreciates the opportunity to respond to the IOSCO Retail Market Conduct Task Force's consultation on retail investment trends.
In our view, the IOSCO report provides a comprehensive picture of the retail market trends and risk magnifiers.
We also take the opportunity to share our views on the following areas:
- While social media can as play a key role in educating and democratising investments with wide retail audience, this may also lead to a growing segment of de facto unregulated investment advisers, operating without adequate disclosure level and supervision. This development highlights flaws in the current systems vis-à-vis regulated financial advice that should be addressed by IOSCO in its upcoming work.
- More engaging forms of user experience, such as gamification techniques, should be better developed to mitigate hazards and promote a consumer-centric approach. If well-designed, such techniques have the potential to improve retail access to financial products and act as a catalyst for attracting more retail investors to invest in safer products such as funds.
- It is of paramount importance that the same level of investor protection applies to all distribution channels, social media groups, retail trading platforms and third parties. For this reason, we argue that some legal responsibility should be placed on social media and online social trading platforms.
- Well-designed digital disclosures can provide a more tailored experience and enable well-informed investment decisions while avoiding information overkill.
- National securities regulators that are IOSCO members should be better funded and equipped to expand their monitoring and enforcement on social media and platforms, as well as attain more product intervention powers.