29 May 2014

IOSCO consults on strategic framework for investor education/financial literacy

IOSCO published a consultation report on the Strategic Framework for Investor Education and Financial Literacy, which describes IOSCO’s role in promoting investor education and financial literacy and its strategic approach to both.

"Investor education and financial literacy is a shared responsibility - for investors, industry and regulators alike. This international Committee is essential in pulling together and considering, at a global level, the best thinking and research by our members in the field of financial literacy", said Howard Wetston, Chair of the Ontario Securities Commission. "Today, we have published a new strategic framework, which will guide our efforts in establishing investor education initiatives that are impactful, substantive and ultimately empower investors."

The report identifies practices currently used by members of the Committee on Retail Investors to address these and other issues, in an effort to help guide the wider IOSCO membership in developing and enhancing their own investor education and financial literacy programs. To develop its programs and initiatives, the Committee on Retail Investors will draw on findings from fact-based research, as appropriate. This could include primary and secondary research, investor outreach and consultations. Research may also include empirical testing to determine, for example, the effectiveness of investor education and financial literacy strategies, programs, tools and other materials, and their effect on individual investor behaviour.

The Committee also will focus on findings from the field of behavioural economics and finance, which financial educators are beginning to use to identify the psychological barriers to investment and to develop educational strategies. At its June 2013 meeting, the IOSCO Board agreed to build upon the learnings of behavioural economics in IOSCO’s approach to regulatory work going forward. The report includes appendices on behavioural economics and other findings related to financial decision-making and a behavioural economics literature review. To further improve the framework, IOSCO asks stakeholders to convey their comments on this high level paper by 31 July 2014 COB CET.

Full media release

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