The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published today a discussion paper on the digitalisation of retail investment services and related investor protection considerations. ESMA is seeking stakeholders input by 14 March 2024 on recommendations regarding online disclosures, digital tools, and marketing practices.

In the Discussion Paper ESMA explores the evolving landscape of retail investments. This includes examining the recent surge in the adoption of digital tools and social media by firms and retail investors following the Covid-19 pandemic, and an exploration of how technology impacts retail investor behaviour and decision-making.

Based on the supervisory experience of the National Competent Authorities (NCAs) and relevant academic literature, ESMA assesses both the opportunities and the potential risks linked to digitalisation.

ESMA’s recommendations cover the following main topics:

Layering and accessibility of information
Digital marketing communications and practices
The use of influencers
Social features of investment apps
Gamification
Nudging techniques
Dark patterns