Global securities regulators are stepping up their efforts at retail investor protection in the face of the rise of financial influencers, social media and the ongoing digitalization of the investment business.<\/p>\n
The International Organization of Securities Commissions (IOSCO) announced that it is embarking on a new strategy to promote safe investing and guard against fraud through a combination of investor education and tougher regulation.<\/p>\n
“This strategic initiative aims to safeguard retail investors worldwide from fraud, excessive risk and misinformation as digital trading and social media reshape the retail financial market,” the group said in a release.<\/p>\n
IOSCO said that the effort will be rolled out in five waves over the next 12 months, starting with the release of three consultation papers today that focus on a trio of emerging risks \u2014 so-called finfluencers that share unregulated advice on social media; digital engagement practices, such as gamification which is designed to drive retail trading; and copy trading platforms that offer automated retail trading.<\/p>\n
In those reports, published for consultation until Jan. 20, 2025, the regulators detail the emerging risks that these developments can pose to retail investors, and set out “good practices” for regulators, industry firms and participants to consider with a view to ensuring adequate investor protection.<\/p>\n
Next March, it plans to launch a consultation on broker-dealer conflicts of interest, which will set out the regulators’ recommendations. At the same time, it is planning to seek the help of internet providers in combatting online fraud, and to release a new investor alert system.<\/p>\n
In May, IOSCO will hold a roundtable on investor education with the Organization for Economic Cooperation and Development, and it plans to issue its final reports on finfluencers, digital engagement practices and copy trading. The final report on broker conflicts is slated for November 2025.<\/p>\n
With these efforts, IOSCO said that it’s introducing, “a comprehensive approach focused on regulation, education and collaboration to address emerging digital risks, that stem from technological developments and increasing impact of social media on retail investor decisions.”<\/p>\n
Additionally, the group said that it will, for the first time, engage with social media companies, search engines and internet providers, “to encourage them to restrict and monitor harmful content, protecting retail investors on a global scale.”<\/p>\n
“The roadmap is a landmark step toward creating a safe and transparent digital investment environment,” said Jean-Paul Servais, chair of IOSCO\u2019s board and chairman of the Belgian Financial Services & Markets Authority, in a release.<\/p>\n
\u201cThe online and cross-border nature of product offerings exacerbates potential risks to retail investors everywhere,” said Derville Rowland, chair of IOSCO’s retail investor coordination group.<\/p>\n
“Our new roadmap outlines how IOSCO will engage with market participants on appropriate market conduct online and with social media and internet platforms globally to work with us to help combat retail fraud and eliminate bad actors. It also illustrates how we will equip retail investors with the knowledge they need to make informed decisions and identify potential online threats,” she added.<\/p>\n","protected":false},"excerpt":{"rendered":"
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