Investor Behavior and Investor Education in Times of Turmoil: Recommended Framework for Regulators based on Lessons Learned from the COVID-19 Pandemic

This report provides a literature review conducted as well as insights from IOSCO members that found evidence of worldwide shifts in trading patterns and decisions, social media use, market participation, and volatility during COVID-19. In addition, it provides the results of a survey that was conducted among member regulators working on developing this framework, designed after the literature review analysis, on the types of measures implemented during the pandemic that helped protect retail investors (directly or indirectly). Findings from the survey strongly suggest that COVID-19 led to changes in investor behavior, with a corresponding uptick in potential investor vulnerabilities. Also, information on the measures regulators and investor educators took to increase retail investor protection during periods of extreme market volatility and economic turmoil. Finally, sound practices for retail investor protection and investor education based upon research carried out during the pandemic.