Retail investors’ access to novel, but complex and risky investment products is a growing priority for global securities regulators.
In a paper setting out its agenda for the year ahead, the umbrella group of regulators, the International Organization of Securities Commissions (IOSCO), highlighted the increasing availability of new products — such as private credit investment vehicles, crypto asset funds and derivatives — as an emerging issue for regulators.
While novel products can provide investors with more choice, “their inherent complexity and the way they are distributed to investors may also introduce new risks,” it noted.
In response, IOSCO said that it plans to explore that trend, “which presents a dual landscape of opportunities and risks,” as part of its ongoing work to enhance retail investor protection.
Indeed, last year, the group launched a strategic initiative targeting online investor protection amid the growth of digital trading and social media, which has increased investors’ exposure to fraud, elevated investment risk, and misinformation.
This year, IOSCO plans to continue working with online access points, such as social media companies, search engines and internet providers “to advocate for the restriction and monitoring of harmful or fraudulent content,” it said.
Alongside its work on retail investor protection, the group is also undertaking a range of projects dealing with financial market operations and resilience — including reviews of its principles on investment fund valuation, secondary market disclosure standards and its commodity derivatives principles.
In this area, it’s planned several new initiatives for 2026, including work on the fragmentation of over-the-counter (OTC) derivatives reporting, market liquidity and extended trading hours for equity trading, and doing some follow-up work on leverage and data availability in the shadows banking realm.
On the crypto front, IOSCO is also planning to finalize a formal methodology for overseeing crypto and digital assets, and to launch regular thematic reviews in this area.
And, it plans to develop guidance for firms on disclosures and governance in relation to the growing use of AI in the financial sector, along with “a supervisory tool kit” on AI.
Additionally, it plans to work on issues that arise through the ongoing decline of public debt and equity issuance, coupled with the growth of private markets, and the increased fragmentation of trading.