The European Securities and Markets Authority (ESMA) issued recommendations to the European Commission on certain aspects of retail investor protection on Friday 29 April.
In this opinion, ESMA sets out proposals that will make it easier for investors to obtain the essential information they need to make informed investment decisions, while being protected from aggressive marketing techniques.
“We are encouraged to see that digital trends and new business models are contributing to making investing more accessible to the general public. These developments do not however come without risk. Gamification techniques in trading apps and personal recommendations on social media may cause retail investors to engage in trading behaviour without understanding the risks involved”, warned Verena Ross, Chair of ESMA, in a statement.
Among the recommendations, ESMA suggests requiring the automatic readability of disclosure documents, tackling information overload, and developing a standard European format for disclosure of costs and fees and the alignment of disclosures.
To read the report: https://aeur.eu/f/1fe (Original version in French by Anne Damiani)