19.07.2022
The Cyprus Securities and Exchange Commission (CySEC) has announced a new investor protection campaign to help deal with the growing international investment damage disaster.
In the press release, CySEC specifically warns of the growing use of “financiers” and “gamification” techniques used on social media to manipulate young investors.
Launching the campaign, Dr. George Theohharides, Chairman of CySEC, said that rapid technological development, uncertain market conditions and the COVID-19 pandemic have contributed to a significant increase in online retail in recent years.
“CySEC is concerned about the growing involvement of young, inexperienced investors and the proliferation of content on social media and online platforms to promote complex products that are not always what they seem. Of particular concern is that the already low level of financial literacy is also declining and this has exacerbated the risk that young people do not fully understand the unique characteristics and risks that trading in these products can carry, and many of them will fall into the trap”, – he said.
According to the press release, social media channels are increasingly being used to promote complex and risky products such as crypto assets, with some hiring celebrities and internet influencers who can entice investors to invest in the products and services they are talking about. may know very little, and which may not be suitable for them. The gamification of investing also raises concerns.
“Unsurprisingly, these gamification methods are especially attractive to young people, many of whom have little experience in investing and are likely to end up losing their money,” said Dr. Theocharides.
The new CySEC campaign will warn investors to make decisions not based on emotions and social pressures, but based on rational thinking and gaining more knowledge about the products they buy and who they buy from.
The campaign complements CySEC’s ongoing oversight work to crack down on unlicensed investment services and warn licensed entities of their legal obligation to protect the interests of their investor clients in all of their communications. There are financial sanctions for non-compliance.
Dr. Theohharides also noted the urgent need for financial education programs to help people develop new skills, and this was recognized in the recently approved national financial literacy strategy.
The CySEC Campaign includes a series of investor guides available on a dedicated financial education section of the CySEC website ( https://www.cysec.gov.cy/en-GB/investor-protection/financial-education/ ). The campaign will make extensive use of social media to reach a younger audience, backed by detailed step-by-step guides and tips to help retail investors navigate investment markets safely.
