The European Capital Market Authority (ESMA), the EU regulatory authority and supervisor, announced that it has written to various social media and platform companies that encourage them to take precautionary measures to prevent the promotion of unauthorized financial services.
Esma’s social media providers include X (former Twitter), Meta (which exploits Facebook and Instagram), Tiktok, Alphabet, Telegram, Snap, Amazon, Apple, Google and Reddit.
ESMA has said that the increasing spread of electronic fraud aimed at retail investors raises a serious risk to investors themselves and society, with delay operators exploiting digital platforms for advertising illegal financial services. These activities often mislead consumers to engage in businesses who do not have the right license, resulting in financial losses and the loss of confidence in the financial sector.
This approach complements last week’s initiative launched by the International Securities and Exchange Committees, underlining the global nature of online damage linked to the economic misconduct.
The financial regulators worldwide have destroyed the advertising of financial services and the provision of commercial and investment advice to retail traders, especially through social media. Earlier today we mentioned that the UAE SCA started the region’s first finfluence license to regulate what was a growing social media phenomenon that handed over advice.