Over the past months inflation rates have risen in the EU, as in the rest of the world, and this growth in inflation has impacted households both in their daily lives and in their investments and investment decisions.
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes a statement reminding
firms to consider inflation and inflation risk when applying relevant
MiFID II requirements in the interest of investor protection.
ESMA notes that from an investor protection perspective, this trend
poses a risk for retail investors, as some of them will not fully
appreciate the link between inflation and financial markets and may not
fully understand how considerations on inflation should be factored in
when they make saving and investment decisions.
ESMA is therefore issuing this Statement to remind firms of relevant
MiFID II requirements as it believes that investment firms may play a
role in considering inflation and inflation risk, both when
manufacturing and distributing investment products and when providing
investment services to retail clients. Investment firms can also help
raising clients’ awareness of inflation risk.
Next steps
ESMA and the national competent authorities (NCAs) will continue to
monitor closely financial markets and their participants in the interest
safeguarding the stability of the EU's financial system by enhancing
the protection of investors and promoting stable and orderly financial
markets.
ESMA
© ESMA
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