Central Bank of Ireland and IOSCO report on retail market conduct issues

The International Organization of Securities Commission’s (IOSCO) Retail Market Conduct Task Force (RMCTF), co-chaired by the Central Bank of Ireland and the Australian Securities & Investments Commission, has published the Retail Market Conduct Task Force Report: Consultation Report (PDF).

The IOSCO Consultation Report provides a clear picture of the evolving global retail investor trends and their implications for market conduct. Among other issues, it examines the reasons for and regulatory and market implications of increasing gamification, self-directed trading and the influence of social media on retail investor behavior.

The current market environment may have created fertile ground for fraudulent actors to commit scams and other fraud. Since the onset of the COVID-19 pandemic, IOSCO has observed rising cases of misconduct and reported investor losses, some of them cross-border in nature. The report also explains how IOSCO members address these evolving misconduct trends, including through the use of advanced technological tools.

The findings of the report are largely based on a comprehensive survey that IOSCO conducted in 2021 and public information issued by IOSCO members.

Derville Rowland, Director General, Financial Conduct at the Central Bank of Ireland and co-chair of the IOSCO RMCTF, said: “Investor Protection is at the forefront of our work and the valuable insights and experiences contained in this report will strengthen our work to protect retail investors.  This report should prompt discussion about the way our markets are evolving and how investors behaviour is being transformed. I look forward to hearing the views of regulators, industry and investors in the coming months.”

Notes

IOSCO is the international body that brings together the world's securities regulators and is recognised as the global standard setter for the securities sector. IOSCO develops, implements and promotes adherence to internationally recognised standards for securities regulation. It works intensively with the G20 and the Financial Stability Board (FSB) on the global regulatory reform agenda.

In February 2020, the IOSCO Board established the RMCTF (comprising 14 member organisations from Australia, Ireland, Belgium, Brazil, China, Germany, Hong Kong, Japan, Mexico, Quebec, Singapore, Spain, UK, USA) to examine retail misconduct trends and risks arising in securities markets.

The RMCTF represents work undertaken by securities regulators globally to prevent, detect and respond to retail misconduct issues that impact trust in markets and investor confidence.