The proposed RRIs highlight risks around: inexperienced investors; use of digital tools by younger investors; and spikes in overall trading during periods of market stress.
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes an article on the development of key retail risk indicators (RRIs) for the EU single market.
This development of RRIs is based on the new mandate
ESMA recently received in this regard. ESMA is building on existing
consumer analysis and indicators from the Trends, Risks and
Vulnerabilities Reports to propose a conceptual framework that:
- defines key terms;
- considers how to measure risks practically; and
- identifies sources of risk to consumers.
Within this framework, RRIs should aim to reflect market
developments, especially the rise of online- or mobile-based retail
trading.
Next steps
ESMA will continue to refine and develop RRIs to enhance its risk
monitoring in this area. The article sets out several possible
extensions to the analysis, including broadening the coverage in terms
of the products and markets covered, and enhancing the evidence base on
investor characteristics.
ESMA
© ESMA
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