‘Gamification’ in financial markets under scrutiny, says EU watchdog

European Union flags are seen exterior the EU Fee headquarters in Brussels, Belgium November 14, 2018. REUTERS/Francois Lenoir/File Picture

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LONDON, Jan 25 (Reuters) – Gamification has launched a brand new technology of retail buyers to monetary markets who might not be conscious there are few protections in property like cryptocurrencies, the European Union’s securities watchdog mentioned on Tuesday.

Gamification refers to utilizing smartphones to commerce, a development which took off on Wall Road throughout the coronavirus pandemic with apps like Robinhood, and has spilled over into European markets.

“We would like buyers to have interaction extra in monetary markets and never simply hold their cash beneath the mattress,” Verena Ross, chair of the European Securities and Markets Authority, instructed a Discussion board Europe monetary companies convention.

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However gamification additionally presents vital dangers, creates hypothesis and leaves buyers not realising there are protections when buying and selling markets like cryptoassets, she mentioned.

Social media has additionally allowed the unfold of unauthorised buying and selling recommendation and the bloc is due this yr to revamp its “retail investor” technique to mirror the rise of digital finance, Ross mentioned.

“We’re tips on how to increase consciousness and warn buyers what they’re letting themselves in for,” Ross mentioned.

The bloc has already proposed banning “cost for order movement” within the retail market.

However EU regulators face a balancing act between defending buyers whereas permitting retail funding to flourish in a area which has lengthy favoured financial savings merchandise.

The bloc has made a push to deepen its capital market to encourage firms to boost funds by issuing shares quite than counting on banks, made all of the extra pressing by Britain’s departure from the EU.

Alexandra Jour-Schroeder, a senior official within the European Fee’s monetary companies unit, mentioned “cumbersome” itemizing guidelines shall be reformed because the bloc lags “far behind” different jurisdictions in serving to firms increase funds on markets.

However Francesco Ceccato, CEO of Barclays Europe, mentioned extra was wanted to harness large financial savings within the EU to inexperienced the financial system.

“What we actually want is to marshall higher political assist round one thing that may be a bit extra radical in some locations… to create an fairness tradition within the EU,” Ceccato mentioned.

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Reporting by Huw Jones, enhancing by Ed Osmond

Our Requirements: The Thomson Reuters Trust Principles.

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‘Gamification’ in financial markets under scrutiny, says EU watchdog

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