Four Years as IOSCO C8 Chair: Adapting to Change, Protecting Investors

Looking back on my four-year tenure as Chair of the International Organization of Securities Commissions (IOSCO) Committee 8 on Retail Investors (C8), I feel both humbled and proud of the progress we have achieved. During this time, the financial landscape has evolved dramatically, driven by rapid technological advancements, new financial instruments and increasingly complex risks. 

C8's mandate — to lead IOSCO’s policy work on retail investor education and financial literacy and to advise the Board on emerging retail investor protection matters — may not have changed, but our approach has transformed. It became clear to us that adapting our methods was not just beneficial, but essential to fulfill our mission. 

Navigating emerging risks in an evolving financial landscape 

In recent years, the global financial ecosystem has undergone significant transformation. The rise of digital assets, blockchain technology and decentralised finance (DeFi) introduced new classes of investments, posing both opportunities and considerable risks for retail investors.  

These innovations have challenged traditional regulatory frameworks, adding layers of complexity that many retail investors struggle to understand. 

As Chair of C8, I have seen cryptocurrencies transition from a niche interest to a mainstream investment, with an ever-growing number of retail investors engaging with these highly volatile markets. Unfortunately, this trend has been accompanied by numerous instances of fraud and significant investor losses. This experience underscores the critical role that regulators must play in safeguarding retail investors in these emerging sectors. 

Additionally, the advent of finfluencers, digital trading platforms and gamified investment apps has sometimes prompted retail investors to trade excessively, select unsuitable products, or adopt other harmful behaviours. In this context, financial education is of paramount importance. Empowering retail investors with knowledge can help them navigate increasingly complex markets and make more informed decisions. 

Towards a collaborative regulatory approach 

Recognising the multifaceted nature of these new challenges, C8 has increasingly collaborated with other IOSCO committees, such as the Committee on Market Intermediaries (C3) and the Committee on Enforcement and the Exchange of Information (C4). This cross-committee approach has allowed us to address emerging retail investor concerns in a more comprehensive and integrated manner. 

C8 has also leveraged the work of IOSCO’s Fintech Task Force on Crypto and Digital Assets and Decentralised Finance, to provide regulators with updated information on crypto-assets. This information is vital for designing effective investor-education initiatives tailored to the needs of retail investors. However, we are acutely aware that no policy development, no matter how precise, can be effective without an equally robust financial education strategy. 

Evolving financial education with market changes 

Traditional investor education methods, such as brochures and workshops, still have their place. However, they may not fully resonate with today's retail investors, who increasingly rely on digital platforms and mobile apps for information. To meet this evolving demand, we must embrace innovative ways to reach investors, such as online tools, AI-driven content, social media campaigns and mobile apps. 

Financial education is closely aligned with IOSCO's mission and plays a vital role in enhancing investor protection. Improving financial literacy requires a nuanced understanding of emerging trends and their impact. By providing investors with the appropriate knowledge and skills, we can build a more inclusive and resilient financial ecosystem.

At IOSCO, we are committed to ensuring that investor education remains a cornerstone of international financial discussions, evolving alongside market changes. 

World Investor Week 2024: a platform for change 

IOSCO’s annual global campaign, World Investor Week (WIW) is an invaluable platform to raise awareness about the importance of investor education and protection. This year’s campaign gives us an opportunity to reflect on the lessons we have learned and to highlight the resources available to investors navigating a complex financial world. 

Looking to the future  

My time as Chair of IOSCO’s C8 has been marked by rapid change and unprecedented challenges. We have confronted new risks head-on while maintaining our commitment to investor protection. As I hand over the baton to my successor, I am confident that IOSCO will continue to play a pivotal role in promoting investor protection and financial education.