IOSCO calls for stronger disclosures in reports on “finfluencers”
Whether it’s a sports identity or a social media star, wherever you are in the world you’ve probably seen posts, videos and advertisements for a wide variety of financial “opportunities” that seem too good to be true.
Generally because they are! This month the International Organization of Securities Commissions (IOSCO) published its final reports on Finfluencers, Online Imitative Trading Practices, and Digital Engagement Practices. These reports form the third wave of IOSCO’s global Retail Investor Online Safety strategy, aimed at tackling online fraud, excessive risk-taking, and misinformation in today’s digital financial markets.
The Finfluencers report flags regulatory gaps around unregistered influencers who promote investments without professional oversight. Meanwhile, the Online Imitative Trading report warns of risks when retail investors blindly copy high-risk trading strategies without fully understanding potential losses. The Digital Engagement Practices report highlights how platform techniques like gamification can blur the line between financial advice and marketing, potentially skewing investor behaviour.
Among other measures, IOSCO stresses the need for comprehensive, clear disclosures to protect investors and uphold market integrity. The reports propose best practices for regulators, intermediaries, and influencers to foster transparency and accountability in a fast-evolving retail market.
IOSCO Board Chair Jean-Paul Servais emphasised: “These reports set globally aligned expectations for ethical conduct and effective oversight, ensuring technology builds trust rather than undermines it.” The Retail Investor Coordination Group Chair Derville Rowland added that these frameworks help balance innovation with investor protection.
Read more here.
