• Simplifying disclosures: Current disclosures are criticised for being lengthy, complex, and not user-friendly, particularly for digital-first investors. ESMA plans to streamline these requirements, introducing clearer, layered, and mobile-friendly formats.
• Reducing complexity in assessments: Suitability and appropriateness assessments, while valuable for investor protection, are seen as burdensome. ESMA aims to simplify these processes, especially for straightforward products and digital channels, while addressing the complexity of integrating sustainability preferences.
• Addressing non-regulatory barriers: Issues such as lack of trust, high fees, limited product comparability, low financial literacy, and complex cross-border taxation were highlighted. ESMA emphasises the need for broader reforms, including financial education and tax alignment across member states.

ESMA will use these insights to guide updates to MiFID II guidelines and provide technical advice for the Retail Investment Strategy (RIS). Consumer testing will play a critical role in validating improvements, ensuring they meet the needs of diverse investor profiles, including mobile-first users.

ESMA’s news release can be found here