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The threat posed to retail investors from pandemic-driven disruptions has shot to the top of the global regulatory agenda.

The International Organization of Securities Commissions (IOSCO) has published its priorities for the next couple of years, and those highlight concerns about retail investor protection due to increased misconduct risks, the threat of fraud and concerns about operational resilience.

“The Covid-19 pandemic has created economic and social situations, such as job losses, financial strains, physical and social isolation, and active online engagement, which can increase conduct risk and magnify retail investors’ susceptibility to scams and frauds,” the group noted.

In response, IOSCO’s Retail Market Conduct Task Force will be leading work to address this area of concern.

“In 2021 and beyond, the response to the risks arising from Covid-19 will continue to be a key pillar of IOSCO’s agenda,” said Ashley Alder, chair of IOSCO’s board and CEO of Hong Kong’s Securities and Futures Commission (SFC).

“IOSCO will also continue to focus on investor protection and market integrity, as well as examining the impacts of Covid-19 – and in particular remote working – on misconduct risks, fraud, and operational resilience,” Alder said.

Another new priority for the group is financial stability and systemic risks in the shadow banking sector due to market stress caused by the pandemic.

Alongside these pandemic-driven priorities, IOSCO’s agenda includes ongoing issues such as crypto asset regulation, market fragmentation, passive investing and indexing, the digitalization of retail distribution, artificial intelligence and machine learning, sustainability reporting, and corporate debt and leverage.

IOSCO noted as well that its Sustainable Finance Task Force will be focusing on asset managers and greenwashing, along with ESG ratings and data providers.