IOSCO Suggests Sound Practices to Protect Senior Investors from Fraud
The IOSCO Board published report that examines the growing vulnerability of aging investors to financial fraud and other risks. The report explores the views and experiences of IOSCO members with regard to senior investor vulnerability. It provides a list and description of sound practices for regulators and financial services providers in this area and concludes with recommended next steps.
The report on senior investor vulnerability reveals that seniors are at a higher risk, than other investors, of losing money to fraud or of being misled by others. It also indicates that the biggest risks to senior investors are unsuitable investments, financial fraud, and their diminished cognitive capability, which affects their financial decision-making. Research indicates that age-induced cognitive decline is linked to impaired financial decision-making. Some research also correlates aging with increased susceptibility to financial exploitation and fraud. These vulnerabilities are growing just as many investors assume greater responsibility for their retirement and financial future. The report offers sound practices for financial services providers, which include offering support to senior investors experiencing a life event during the product lifecycle and providing training and support for employees of financial services firms. Additionally, the sound practices for regulators include the following:
- Deliver educational programs and resources targeting senior investors
- Foster the development of senior-focused expertise within existing regulatory, educational, or advisory programs
- Conduct research projects to better understand the risks and issues facing senior investors and the incidence and mechanics of investment fraud that affect seniors in their jurisdictions
- Develop guidelines and training programs for personnel reviewing transactions conducted with senior investors
The C8 Senior Investor Vulnerability working group will conduct an analysis of the impact of this report after one year to determine if any jurisdiction has changed or is planning to change its approach to protecting seniors from inappropriate and fraudulent investments. The working group is also considering creating an online toolkit, or other resources, to help jurisdictions take action based on the report.
Related Links
Keywords: International, Securities, Vulnerability of Aging Investors, Senior Investors, Sound Practices, IOSCO
Previous Article
BOT Publishes Reporting Documents for TFRS 9 and Financial Data SetRelated Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards