Analysis of the shifting dynamics of retail participation in European Equity markets and proposals for inscreasing engagement.
Widening retail participation in equity markets
At a time when technology should enable more people than ever before to invest in the stock market, retail engagement has fallen over the past few decades in the UK and in many European economies.
This report by Maximilian Bierbaum and Sheenam Singhal from New Financial measures the levels of retail participation in equity markets; outlines the potential benefits to households, the economy, and the capital markets; and makes 12 recommendations to increase retail investor engagement.
Foreword by Valérie Urbain – Chief Business Officer, Euroclear
Owners of publicly listed firms are all of us - whether we are direct shareholders in company stocks or investors in funds, or beneficiaries of pensions.
In a world that is recognising demands for transparency and autonomy for investors to express their preferences as owners of companies, it is not only preferable but urgent, that they are able to exercise their rights.
Policymakers agree. Retail investors, charity endowments and fund managers should have the opportunity to express their views to management and effectively steer these global corporations and small businesses that they own.
This report represents a bold and necessary call to action to corporations, financial institutions, and policymakers about how we can turn more citisens into shareholders, and ensure digitisation enhances the communication between investors and boardrooms. Holders of paper share certificates should know that changes are intended to improve, not diminish, communications, including for secondary capital raising. Accommodating varying service requirements and levels of digital adoption will continue to be key considerations.
Euroclear group is the world's largest group of Central Securities Depositories (CSDs), with EUR36.8 trillion of assets under custody; as such, we have long had a significant role in providing services to promote sustainable good governance -the 'G' in ESG - through networks that facilitate investor engagement. Euroclear UK & International operates the CREST settlement system, which settles an average of GBP349 billion in transactions each day, and is modernising the infrastructure for the secure and resilient financial and communication fiows that modern society demands.
And as central bank-supervised Financial Market Infrastructures (FMls), serving markets across Europe, we are working with authorities to ensure initiatives like the UK Digitisation Taskforce, and the EU Shareholder Rights Directive II, support the combined ambition of enlarging European equity markets, with the symbiotic requirements of investors.
