The European Securities and Markets Authority (ESMA), the
European Union’s financial markets regulator, has issued a letter to multiple
social media and digital platform companies. These include X, Meta, TikTok,
Alphabet, Telegram, Snap, Amazon, Apple, Google, and Reddit.
The letter urges these companies to take active measures to
prevent the promotion of unauthorised financial services on their platforms.
Fraudulent Ads Threaten Investors and Trust
In its letter, ESMA emphasizes the impact of online scams on
both investors and society. It states: “The increasing spread of online
scams targeting retail investors poses a serious risk to investors themselves
and to society as a whole, with fraudulent actors exploiting digital platforms
to advertise unlawful financial services.”
“These activities often mislead consumers into engaging with
firms that lack proper authorisation resulting therefore in financial losses
and also in the loss of trust in the financial sector and, more widely, in
social media platforms and in the digital environment.”
ESMA highlights the growing problem of online scams
targeting retail investors. Fraudulent actors use digital platforms to
advertise financial services without proper authorisation. This practice can
mislead consumers and cause financial losses. It also harms public trust in the
financial sector.
You may find it interesting at FinanceMagnates.com: ESMA
Eyes Marketing of Financial Products in EU, Focuses on Risky Instruments.
Global Effort Targets Online Financial Misconduct
The regulator’s action follows a recent initiative by the
International Organization of Securities Commissions. That initiative addressed
the global scale of online harm related to financial misconduct. ESMA ’s letter
aims to support efforts to reduce such risks in the EU and beyond.
CFD Brokers Shift Amid ESMA Changes
Meanwhile, ESMA,
under the MiFID II framework, is proposing a new reporting requirement for
firms to classify clients as retail, elective professional, professional, or
eligible counterparties. This aims to help national regulators monitor the
distribution of complex products like CFDs.
The move follows a trend of brokers such as IronFX, BDSwiss,
Exness, and FXTM shifting away from the European retail market, either exiting,
focusing on institutional clients, or continuing to serve retail clients via
offshore operations.
The European Securities and Markets Authority (ESMA), the
European Union’s financial markets regulator, has issued a letter to multiple
social media and digital platform companies. These include X, Meta, TikTok,
Alphabet, Telegram, Snap, Amazon, Apple, Google, and Reddit.
The letter urges these companies to take active measures to
prevent the promotion of unauthorised financial services on their platforms.
Fraudulent Ads Threaten Investors and Trust
In its letter, ESMA emphasizes the impact of online scams on
both investors and society. It states: “The increasing spread of online
scams targeting retail investors poses a serious risk to investors themselves
and to society as a whole, with fraudulent actors exploiting digital platforms
to advertise unlawful financial services.”
“These activities often mislead consumers into engaging with
firms that lack proper authorisation resulting therefore in financial losses
and also in the loss of trust in the financial sector and, more widely, in
social media platforms and in the digital environment.”
ESMA highlights the growing problem of online scams
targeting retail investors. Fraudulent actors use digital platforms to
advertise financial services without proper authorisation. This practice can
mislead consumers and cause financial losses. It also harms public trust in the
financial sector.
You may find it interesting at FinanceMagnates.com: ESMA
Eyes Marketing of Financial Products in EU, Focuses on Risky Instruments.
Global Effort Targets Online Financial Misconduct
The regulator’s action follows a recent initiative by the
International Organization of Securities Commissions. That initiative addressed
the global scale of online harm related to financial misconduct. ESMA ’s letter
aims to support efforts to reduce such risks in the EU and beyond.
CFD Brokers Shift Amid ESMA Changes
Meanwhile, ESMA,
under the MiFID II framework, is proposing a new reporting requirement for
firms to classify clients as retail, elective professional, professional, or
eligible counterparties. This aims to help national regulators monitor the
distribution of complex products like CFDs.
The move follows a trend of brokers such as IronFX, BDSwiss,
Exness, and FXTM shifting away from the European retail market, either exiting,
focusing on institutional clients, or continuing to serve retail clients via
offshore operations.
This post is originally published on FINANCEMAGNATES.
