On 12 October 2022, the International Organization of Securities Commissions (IOSCO) published a final report on retail distribution and digitalisation.
IOSCO sees retail distribution and digitalisation as a priority given the recent and rapid developments in online marketing and distribution which are changing the way in which financial firms interact with prospective clients and financial products are offered to retail investors. Such developments have spanned across the whole distribution chain, from online marketing techniques, such as targeting methods and psychology based selling techniques, to onboarding procedures.
The final report considers global developments in online marketing and distribution of financial products to retail investors and discusses enforcement challenges encountered by regulators. It sets out examples of how some member jurisdictions have addressed these issues. It also sets out examples of how some member jurisdictions have addressed these issues.
The toolkit of policy measures relate to:
- Firm level rules for online marketing and distribution.
- Firm level rules for online onboarding.
- Responsibility for online marketing.
- Capacity for surveillance and supervision of online marketing and distribution.
- Staff qualification and/or licensing requirements for online marketing.
- Ensuring compliance with third country regulations.
- Clarity about legal entities using internet domains.
The enforcement toolkit measures relate to:
- Proactive technology-based detection and investigatory techniques.
- Powers to promptly take action where websites are used to conduct illegal securities and derivatives activity and other powers effective in curbing online misconduct.
- Increasing efficient international cooperation and liaising with criminal authorities and other local and foreign partners.
- Promoting enhanced understanding and efforts by, and collaboration with, providers of electronic intermediary services with regard to digital illegal activities.
- Additional efforts to address regulatory and supervisory arbitrage.