Retail market conduct task force report initial findings and observations about the impact of covid 19 on retail market conduct

The onset of the COVID-19 pandemic presented a significant shock to the global economy. The financial services industry and retail investors continue to feel the impact of the COVID-19 turmoil while there remains significant uncertainty about the duration of the pandemic, lock-downs, and other efforts to support the economy and curb the pandemic. Amidst the sudden and unexpected reduction in overall economic activity, it was and continues to be uncertain how extreme market volatility and the effect of closures will ultimately affect the markets. This raises various questions related to the potential impacts of the pandemic on the value of investment products, retail investor trends, and whether there will be an indelible effect on the regulation of the securities market going forward and the way in which supervision is undertaken by regulators.

Observations in this report stem primarily from commonalities across case studies received from IOSCO members focusing on market environment, key drivers of firm and investor behavior in periods of stress that provide increased opportunities for retail misconduct, and regulatory measures and tools used to address retail losses or mitigate misconduct risks.