View more on these topics

European regulator issues online investor warning

Currency Pound Keyboard Sterling 440

The European Securities & Markets Authority has published a Europe-wide investor warning about investing online.

The warning, available in all the official languages of the European Union, alerts investors to the risks of online investing and provides tips for investing safely via the internet.

The European regulator’s key messages are:

  • Be aware of the potential risks involved in online investing.
  • Check if the firm is authorised.
  • Be wary of promises of high returns.
  • Be aware of software that automatically generates transactions for you.
  • Take special care when you’re asked to provide your credit card details.
  • If you do not understand what’s on offer, do not invest.

Esma has acted as the internet is increasingly used to market investment products to retail investors.

It warned investors of high pressure and aggressive selling and marketing via the web to encourage investors, such as special offers or demo access to systems.

The regulator warned that not all firms have permission to offer investments.

“While visiting a firm’s office and physically interacting with advisers may help to evaluate its seriousness, a homepage is an easily created marketing tool which does not necessarily match reality,” it adds.

According to the warning, Esma and other national regulators have seen an increase in investor complaints about unauthorised activities by firms on the internet.

The regulator has encouraged investors to contact regulatory authorities if questions or doubts remain.

The English language version of the warning can be accessed by clicking here.


News and expert analysis straight to your inbox

Sign up


    Leave a comment