ESMA launches call for evidence on retail investor protection

ESMA has published a call for evidence on a number of retail investor protection topics under MiFID II. The views of the call for evidence will feed into ESMA’s technical advice to the European Commission on the development of its retail investment strategy. The call for evidence is open until 2 January 2022.

ESMA is requesting information on the following three topics:

1. Disclosures: identification of any significant overlaps, gaps, redundancies and inconsistencies across investor protection legislation that might have a detrimental effect on investors. In particular, the call for evidence seeks input on how the rules work from a retail investor perspective – whether consumers can make informed choices, avoid information overload and overly complex information while ensuring investor protection;
2. Digital disclosures: an assessment of how regulatory disclosures and communications can work best for consumers in the digital age, and proposes options as to how existing rules might be adapted, such as allowing layered information; and
3. Digital tools and channels: an assessment of both risks and opportunities with respect to retail investing stemming from both the increasing availability of digital tools and the increasing levels of direct investor participation via online trading platforms and robo advisors. In addition, the call for evidence also explores the topic of open finance i.e. how far value chains should be opened up by sharing specific investor data amongst investment firms and third party providers.

ESMA will hold a public hearing in Q4 2021. Registration for the hearing will be available on ESMA’s website in due course.

ESMA points out that due to the tight deadline set by the Commission (April 2022) no further consultation will be possible.