On 14 December 2023, the European Securities and Markets Authority (ESMA) issued a Discussion Paper on MiFID II investor protection topics linked to digitalisation.

The Discussion Paper discusses the main trends in digitalisation that are linked to the MiFID II investor protection topics. MiFID II aims at being technology neutral. This means that market participants are able to compete on the same terms and are free to use the technology they want, if they comply with their legal obligations. However, ESMA believes that it is important to look at whether the current legislative framework is still fit for purpose amidst the new technological developments, or whether it needs adjusting. The Discussion Paper looks at the design of digital engagement practices by firms including the choice architecture and the use of certain techniques, such as gamification. It also focuses on the opportunity digitalisation brings to both investors and firms since digitalisation has made the user experience of the retail investor a lot faster and smoother.

The deadline for comments on the Discussion Paper is 14 March 2024.

ESMA states that it will use the feedback to the Discussion Paper to develop a position on the use of digital engagement practices, such as gamification, as well as on the use of marketing practices (including social media and affiliates) by firms, and to assess whether a regulatory response may be needed.