The European Securities and Markets Authority (ESMA) is
inviting feedback from retail investors and consumer groups on how current
investment rules affect their experience and engagement. The consultation
focuses on whether rules under MiFID II support investor protection or
unintentionally discourage participation.
Understanding Investor Engagement Barriers
“The purpose of this Call for Evidence is to gather feedback
from stakeholders to better understand how retail investors engage with
investment services, and whether regulatory or non-regulatory barriers may be
discouraging participation in capital markets,” ESMA stated.
To broaden its reach, ESMA has issued a simplified version
of the consultation specifically for national consumer organisations. This aims
to collect insights from groups working closely with everyday investors and
ensure that voices from across the retail space are heard.
⛵️ Call for Evidence on the Retail Investor Journey ⛵️We want to better understand:📢 how retail investors engage w/ investment services📢 whether regulatory or non-regulatory barriers may be discouraging participation in capital markets🗓️ 21 Julyhttps://t.co/hhCOMpP5Vi
— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) May 21, 2025
Assessing Regulatory and Practical Obstacles
The regulator is examining whether lengthy disclosures,
complex product language, or digital onboarding practices hinder participation.
It also wants to understand non-regulatory barriers such as fear of financial
loss, trust issues with providers, and a preference for simple or familiar
savings products.
The paper also explores why many younger investors are
turning to speculative assets like cryptocurrencies. ESMA is investigating
whether social media, the promise of high returns, or distrust in traditional
finance contribute to this trend.
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Reviewing Sustainability and Post-Sale Rules
Additionally, the consultation invites input on the recent
requirement for investment firms to incorporate sustainability preferences in
advice and portfolio management. Questions are also being raised about whether
retail investors find post-sale reporting, such as quarterly statements or 10%
loss alerts, helpful or excessive.
The deadline for responses is 21 July 2025. According to
ESMA, the feedback will be used to evaluate potential regulatory changes to
make EU capital markets more accessible and relevant to retail investors.
This article was written by Tareq Sikder at www.financemagnates.com.
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