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.

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.Retail FXRead More

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