On April 29, 2022, the European Securities and Markets Authority (ESMA) published recommendations to improve investor protection relating broadly to disclosures, digital disclosures and digital tools and channels. The goals of these changes would, among others, enhance accessibility, enable comparability, avoid overloading investors with information and exposing them to misleading marketing.

The recommendations include:

• Increase machine-readability of MiFID disclosures to assist the development of tools enabling comparability of information

• Standardization of disclosure information on costs and charges

• Clarification of the definition of marketing communications, encompassing messages on social media

• Raising the visibility of regulatory disclosures and vital information while avoiding information being overlooked among contractual documents and marketing material

• Clarification of costs and charges

• Development of guidelines for digital disclosures and use of digital techniques/tolls by firms and third parties

On the topic of digital disclosures, ESMA considers multiple focus areas:

• Ease of navigability of information

• Retrievability of and possibility to save information

• Presentation and format, gamification

• Choice environment

• Versioning of digital disclosures

• Mitigation of security risks for clients

• Means of communication which include and are not limited to live chats, chat bots, Q&As, infographics, guides, interactive tools, social media

• Social media and influencers

• Risk warnings

Lastly, with increasing availability of digital tools and channels, ESMA assessed the emerging risks and opportunities specifically on Robo-advisers, online brokers and open finance. Continued monitoring and review are required for these developments as they evolve.

The recommendations form part of ESMA mandate to advise the European Commission who requested that the technical advice specifically focuses on disclosures, digital disclosures and digital tools and channels.