On May 23, 2022, FPSB (Financial Planning Standards Board), submitted 11 proposal to IOSCO (International Organisation of Securities Commissions) Retail Market Conduct Task Force to assist in regulating the fast-growing cryptocurrency business.
FPSB is a professional organisation charged with providing licences and certificates to financial planners. The suggestion appeared to be a proposal to the International Organisation of Securities Commissions (IOSCO) Retail Market Conduct Task Force about how regulators might address the adverse consequences of the volatile digital currency environment.
FPSB recommendations to the IOSCO Retail Market Conduct Task Force:
According to the FPSB, there is a rising trend in the field in which social media influencers are frequently taking the responsibilities of financial advisors.
As part of the FPSB proposals, social media influencers termed “Fin-fluencers” should be officially registered and have to demonstrate a particular level of expertise in relation to the information they claim to possess.
The FPSB also suggested that financial authorities limit the use of credit cards to acquire sophisticated financial instruments, while also creating a regulated “sandbox” for social media influencers and exposing those who use it on a public list. If properly implemented, this model will undoubtedly assist this and other financial advisers in being held responsible for the advice they provide.
FPSB also suggested a better relationship between an investor’s status whether “self-directed” or “advised” and the possibility of experiencing catastrophic financial loss while investing in complicated products.
Regulation must designate ‘complex products,’ as well as all ‘complex products’ should be controlled.
“Financial fraud and scams are obviously not new,” said FPSB Head of Stakeholder Engagement Dante De Gori, CFP. “However, the fast rise and growth of crypto assets and other sophisticated digital assets mean the amount of risk and vulnerability for retail investors is being heightened.” “Licensing and product licensing are trying to keep up with this fast-changing world, leaving financial planners confused about their regulatory duties and retail investors to go alone, often with disastrous results.”
The FPSB has joined the list of organisations and individuals advocating for further supervision of the crypto ecosystem since many think the current condition of the market is unsafe for all investors.
