The number of individual investors using cross-border investment services across the EU and EEA jumped by 39% between 2022 and 2024, even as the number of companies offering these services fell from 380 to 370.
The numbers come from the new follow-up report published Forecasts from the European Securities and Markets Authority (ESMA) suggest that cross-border retail investment is becoming increasingly concentrated, with fewer companies serving a much larger client base.
Emirates Authority for Standardization and Metrology It said the comparison should be treated as a proxy because its data collection methodology had been refined over this period, but concluded that cross-border investment activity continues to grow in scale and complexity.
A larger market is concentrated in a few jurisdictions
The ESMA 2024 dataset covers firms serving more than 50 retail clients in a host Member State, meaning it does not cover the entire cross-border retail investment market under MiFID II.
Within this scope, the market includes 370 companies across 30 EU/EEA jurisdictions serving approximately 10.5 million retail customers. Investment companies accounted for 59% of service providers, while credit institutions accounted for the remaining 41%.
The market also remains highly concentrated. The six jurisdictions examined in the SEC’s review – Cyprus, Germany, Luxembourg, the Netherlands, Malta and Czechia – represent 220 companies serving more than six million retail clients, or approximately 60% of the EU/EEA market.
Cyprus, Luxembourg and Germany together represent nearly half of all cross-border businesses, while Cyprus and Germany alone account for nearly half of all retail clients served cross-border.
Complaints rise as moderators expand oversight
The six jurisdictions reported 7,128 complaints relating to cross-border activities in 2024, representing approximately 65% of all complaints received across the EU and EEA. Germany There were 4,936 complaints and Cyprus had 1,103 complaints.
However, ESMA said that the complaint data should be interpreted with caution. In Germany, a single investment firm was responsible for nearly two-thirds of all reported complaints, which shows how individual firms can skew national statistics.
The regulatory body also indicated this Report the complaint It is based on a broad definition of a complaint and may vary between companies, which means statistical outliers are possible.
Beyond market data, ESMA concluded that national regulators have made significant progress since the original 2022 peer review.
According to the report, the authorities have strengthened licensing processes, improved data collection, integrated cross-border indicators into risk scoring models and expanded monitoring of companies operating across borders. Most have also increased the use of data-driven supervision to set supervisory priorities and inspections.
However, ESMA said that supervisory practices and resources must continue to evolve alongside the expanding market.
For companies operating under MiFID passportThe results indicate that regulators are focusing more on cross-border business models as client numbers grow and supervisory risk scrutiny increases.
This article was written by Tanya Chipkova at www.financemagnates.com.
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