The European Securities and Markets Authority (ESMA) has outlined new measures designed to make retail investing in Europe easier, as regulators seek to remove barriers that discourage individuals from entering financial markets.

The proposals focus on simplifying investment disclosures, improving digital investing processes and reviewing investor checks under the EU’s MiFID II framework.

ESMA said many retail investors still struggle with lengthy paperwork, complex terminology and fragmented investment processes when buying financial products.

The move comes as interest in retail investing, ETFs, digital investment platforms and sustainable investing continues to grow across Europe.

Simpler investment disclosures

ESMA said retail investors often receive information that is “too long, too complex” and difficult to use on digital devices.

Responses to the regulator’s consultation highlighted concerns that existing disclosures overwhelm investors rather than help them make informed decisions. Market participants called for shorter documents, clearer language and information designed for mobile investing platforms.

The regulator said it plans to review disclosure requirements to reduce unnecessary complexity while maintaining investor protections.

Consumer testing will also play a larger role in future rulemaking. ESMA said it wants to better understand how retail investors interact with investment apps and digital onboarding processes.

ESMA Chair Verena Ross said regulators must continue “concrete work” to improve retail investor participation in European capital markets.

She added that simplifying the investor journey “must remain a priority”.

Review of investor checks

The regulator also plans to simplify suitability and appropriateness assessments required under MiFID II.

These checks are used by investment firms to determine whether products match an investor’s experience, financial knowledge and risk tolerance. Industry groups told ESMA the process remains important for consumer protection but has become too complicated, particularly for lower-risk products sold through digital channels.

ESMA said it will assess whether parts of the process can be streamlined without weakening safeguards for retail investors.

Sustainability preference assessments linked to ESG investing are also under review. Stakeholders said current requirements can be difficult for investors to understand and challenging for firms to implement consistently.

The review forms part of wider efforts by European regulators to tighten oversight of sustainable finance claims and improve transparency in the investment sector.