London | 6–7 October 2025

By Stephen Deane, CFA, and Phoebe Chan

Published: 9 Apr 2026

Executive Summary

The CFA Institute Capital Markets Policy Council (CMPC) met in person in October 2025 in London to discuss key policy topics and the regional advocacy strategies for CFA Institute in 2026. The purpose of the CMPC is to advise the CFA Institute research and advocacy team on current and emerging policy issues in global capital markets. The CMPC has a global membership of volunteers who are preeminent investment practitioners and financial market experts. The appendix lists the meeting participants. To learn more about the CMPC, please click here.

This report provides an anonymized summary of the discussions, which lasted for two days and were conducted under Chatham House rules.¹ The discussions included deep dives into two key topics (retail access to private markets and tokenization) and regional and global advocacy strategies for CFA Institute.²

Members reached a general consensus on policy recommendations regarding two topics: retail access to private markets, and advocacy priorities when conflicts of interest emerge among investors themselves (see the section “Policy Recommendations”).

Deep Dives

Retail Investor Access to Private Markets

Members discussed whether regulators should expand retail investor access to private markets and, if so, what guardrails should be put in place. Although most but not all members expressed serious concerns about retail access to private markets, they also reached a consensus on policy recommendations to protect retail investors if they are given access (see the section “Policy Recommendations”).

Tokenization

Members compared the variety of regulatory approaches in different regions and focused on two key issues: (1) investor protection concerns, including legal uncertainties concerning ownership rights; and (2) challenges of fragmentation and the need for regulatory harmonization and interoperability, both across and within borders.

Several members viewed tokenization as inevitable, although one member challenged assumptions of its benefits. He argued that tokenization involves trade-offs and introduces disadvantages that offset advantages. For example, although tokenization permits 24/7/365 trading and atomic settlement, those advantages come at the sacrifice of netting trades, catching and correcting mistakes, and enabling certain aspects of compliance oversight.

Regional Strategies

Asia-Pacific Region

Despite their extraordinary diversity, markets in the Asia-Pacific (APAC) region share a common policy goal of increasing the value of capital markets by raising corporate governance standards and undertaking other strategic reforms. To enhance shareholder value, members agreed on the importance of improving corporate governance standards in general and bolstering board independence in particular. They also noted the challenge of highly concentrated share ownership in certain markets, such as India and South Korea, where a single dominant shareholder can own 50% to 75% of the shares of a listed company.

India

Discussion focused on the urgent need for greater protection of retail investors, as highlighted by their extreme losses in derivatives trading. Of the 10 million individuals (10% of all retail investors) who participate in derivatives trading, an estimated 91% have lost money. Losses have averaged approximately USD1,200 per individual annually, a significant sum in a country with a per capita income of USD3,000.

Members discussed whether such problems were country-specific or global. One member tied the specific issue of derivative trading in India to a worrisome global problem: Too many retail investors treat stock markets as casinos. That treatment carries additional risks of tarnishing the reputation of, and diminishing trust in, capital markets around the globe.

European Union Regional Strategy

Members discussed the European Union’s policy goals to integrate capital markets, foster innovation, and mobilize retail savings. Members largely agreed on the following challenges facing EU capital markets:

• widespread inefficiencies along multiple dimensions; 
• failure to attract household savings that are placed in bank accounts instead; 
• gross capital outflows of EUR250 billion to EUR300 billion annually;
• exposure to substantial structural and technological risks, along with heightened dependence on US technology and infrastructure; and
• the absence of a strong centralized or supranational framework to govern the European Union’s 27 national markets. 

Members disagreed, however, on the European Union’s chances of overcoming the challenges and achieving a true single market in capital and financial services. One participant pointed to Canada as a positive example of a country that has overcome regulatory fragmentation and succeeded in harmonizing domestic markets.

Global Advocacy Strategy: When Conflicts Arise Among Investors

CFA Institute policy advocacy places a priority on investor protection, but what happens when the interests of certain investor segments come into conflict with those of another investor segment (e.g., retail investors)? Members discussed this in the context of retail participation in private markets, with one member arguing that the interests of retail investors can conflict with those of private fund sponsors and, perhaps, with institutional investors who also invest in private funds.

Following vigorous discussion and some disagreement, members reached a consensus on recommendations for CFA Institute advocacy policy (see the section “Policy Recommendations”).

Policy Recommendations

There was no requirement or expectation that members reach agreement on the issues, and no votes were taken on formal policy positions. Nonetheless, a general consensus emerged on the following policy recommendations regarding two of the topics discussed. Consensus does not necessarily mean unanimity; individual members may hold different views on any given recommendation.

Retail Investor Access to Private Markets

Participants coalesced around the following recommendations to protect retail investors in the event their access to private markets is expanded:

• Private markets need to improve reporting, transparency, performance measurements, and valuation standards. 
• To manage risks, investors should diversify their investments, preferably by investing across multiple funds.
• To manage risks, regulators should also impose limits on the amount or percentage of investments that individual investors can make in private markets. In addition, regulators should consider imposing or maintaining caps on the percentage of private investments held in funds with retail investors. 
• Education about private markets and the risks they entail is critical. Intermediaries have a critical role to play in explaining the risks to individual investors and in communicating to them in terms they can best understand.
• CFA Institute also has an important role to play in educating professional intermediaries, including investment advisers, fund-of-funds managers, accountants, lawyers, and valuation experts. All of them can serve as important gatekeepers to protect retail investors. 

Global Advocacy Strategy: When Conflicts Arise Between Investors

Participants discussed how the CFA Institute advocacy team could address situations when conflicts of interest arise between different types of investors:

• CFA Institute draws strength from a membership base consisting of individuals, not firms. Advocacy efforts should represent the members, not firms.
• CFA Institute should strive to advance the interests of the financial industry as a whole, rather than the commercial interests of any one firm. That approach is the best way to maintain CFA Institute credibility as an unbiased source of expert views on capital markets policies.
• Ethics is an essential component of CFA Institute. In keeping with that ethics-based approach, CFA Institute should anchor its advocacy on the principle of investor protection, not the commercial objectives of financial firms.
• In addition, an emphasis on investor protection will best enable CFA Institute to get ahead of, and minimize the impact of, any future financial crisis.

Deep Dives

Retail Access to Private Markets

Members discussed whether regulators should expand retail investor access to private markets and, if so, what guardrails they should put in place. A few members favored retail access, but most expressed concerns that private markets were inappropriate for the investing public. Participants coalesced around recommendations to protect retail investors if their access to private markets is expanded (see the section “Policy Recommendations”).

This consensus notwithstanding, members expressed a diversity of views on the fundamental question of whether retail access to private markets should be permitted. A few members appeared to favor retail access. One person maintained that we should fight fraud, not risk. Private markets are a risky asset class, and it is impossible to make it riskless for retail investors. Instead, we should promote disclosure of the risks. Another member cautioned against setting any limits on private market investments in Europe, because he said the region was already suffering from investments gaps in private markets and venture capital.

Other members, however, expressed misgivings over what they saw as a mismatch between retail investors and the features of private markets. Specifically, they said that private markets lack the liquidity, valuation measures, corporate governance standards, and investor protections found in traditional public market securities. One member argued that a core private market performance metric, internal rate of return, was misleading; differed from the metric used by mutual funds and similar public pooled vehicles; and would only confuse retail investors. Another member cited a recent news report depicting a steady decline in private market performance, suggesting that retail investors may be chasing past returns that will not be repeated. Finally, one member argued that traditional portfolio managers may lack the skills needed to analyze and buy private assets.

One member expressed concern that the global push to extend retail access was coming just as many institutional investors were retreating from private markets, amid liquidity pressures brought on by stagnant exit markets and distributions. He cautioned against the risks of adverse selection, in which assets passed up by institutional investors will be sold instead to unwary retail investors.

Another member proposed that CFA Institute adopt a strategically nuanced position that accepts the inevitability of retail access to private markets. Rather than opposing that eventuality, he urged instead that CFA Institute advocate that retail access be allowed only through professional intermediaries — either a professionally managed pension fund or a fund-of-funds, which in turn would invest in private assets or private funds. Professional intermediaries ordinarily would be expected to impose a second layer of fees on retail investors. To avoid this practice, this member argued that fund sponsors should absorb the additional fees.

Tokenization

Members returned to some of the same themes raised in the discussion on private markets, including issues of investor protection, disclosures, and access.

Tokenization is generally understood as the use of distributed-ledger technology to represent traditional assets in digital form. One participant noted that people sometimes talked past each other by blurring the distinctions between the two types of tokenization. In one type of tokenization, a company issues shares directly on a blockchain. In the second type, an intermediary issues a token representing an asset, such as stock, that it may have been acquired in advance. The latter, which the participant called a mirror token or mirror equity, confers economic rights but not governance rights.

Regional Comparisons: Market Practices and Regulatory Approaches

Participants generally agreed that adoption of tokenization technology remained nascent, if occurring at all, in their securities markets. For example, one participant remarked that tokenization in France is embryonic, although blockchain technology could help modernize mutual fund back offices, which he described as antiquated.

Another participant asserted resource-rich stock exchanges should be in the vanguard of adopting tokenization, but they were holding back out of inertia and perceived self-interest in the status quo.

Nonetheless, participants reported that regulators in most regions were actively studying the implications of tokenization on securities markets and were proceeding cautiously. Specifically, members offered the following comparisons:

• United States: In an abrupt shift, the US Securities and Exchange Commission (SEC) has come to embrace tokenization and cryptocurrencies as a way to encourage innovation. One element of that strategy is to establish a solid legal framework for self-custody of cryptocurrencies. One participant criticized the SEC for halting crypto enforcement actions, while another said that the aim of deregulation was to encourage greater competition among custodians and other financial market participants. 
• United Kingdom: The UK Treasury has asked the Financial Conduct Authority and the Prudential Regulation Authority to assess whether current rules for mainstream finance are sufficient, or whether targeted, bespoke rules under the Financial Services and Markets Act are needed to regulate tokenization. 
• APAC Region: Regulators in Singapore and Hong Kong SAR were adopting regulatory sandboxes to become familiar with issues and players. Malaysia has introduced an Initial Exchange Offering (IEO) for tokenized assets as an alternative to initial public offerings. Some companies have issued tokenized bonds on the IEO platform. 
• India: This market appeared to be an outlier, with regulators devoting little to no attention to tokenization. In the views of some participants, tokenization does not address the top concern of India’s regulators—that is, the illiquidity of listed stocks that arises from concentrated holdings, in which founders often own a supermajority of the stock. 

Tokenization Challenges

Participants highlighted two major challenges of tokenization: the need for regulatory harmonization across borders and investor protection within them.

Global Regulatory Fragmentation

The borderless nature of blockchains presents a major challenge to national and regional regulators. For distributed ledger technologies to work effectively across borders, markets need interoperability and harmonized regulations. Instead of harmonization, participants noted the growing fragmentation of global markets. One participant predicted that harmonization (or lack thereof) will become an even greater issue going forward, as policymakers adopt more laws and regulations on digital technologies.

Investor Protection Issues

Participants voiced several investor protection concerns, including the fragmentation that arises not only between borders but within them. For example, the proliferation of digital exchanges can cause market fragmentation and generate multiple prices for the same asset. Unregulated platforms have no obligation to execute customer transactions at the best available price, which is contrary to the best execution requirements for broker-dealers in traditional securities markets.

Digital platforms also raise conflict-of-interest concerns by combining the functions of broker-dealer, exchange, and custodian. Traditional finance, in contrast, generally requires separation of those functions to protect investors.

Finally, ownership rights, in particular for mirror tokens, remain clouded with legal uncertainty and untested by the courts.

Trade-offs: Challenging Assumptions of Tokenization Advantages

Several participants spoke of tokenization as offering greater efficiencies that make it inevitable. One member, however, challenged those assumptions. He argued instead that tokenization presents trade-offs between advantages and offsetting disadvantages. The advantages include 24/7/365 trading and nearly instantaneous settlement of atomic transactions. But those features come at the sacrifice of key advantages of the current system. These advantages include netting transactions, allowing time to conduct multiple cross-checks to catch and correct mistakes, and enabling certain compliance oversight.

This participant also highlighted the contrast because the initial purpose of digital assets — to foster disintermediation — and the current proliferation of intermediaries. Yet tokenization’s promise of reduced fees depends on eliminating or reducing the role of intermediaries. Absent disintermediation, those promises may never be realized.

CFA Institute Role

Several members argued that CFA Institute could help to fill a major need by providing education on tokenization to investors and regulators.

Regional Advocacy Strategies

APAC Region

Mary Leung, senior director, Capital Markets Policy, APAC, set the stage by emphasizing the diversity of markets within the APAC region, which includes behemoths such as the Chinese Mainland and India, large developed markets such as Australia and Japan, and international-flow markets such as Hong Kong SAR and Singapore. Unlike the European Union, the APAC region has no overarching structure designed to achieve political or economic integration. Its diversity notwithstanding, however, the region does share a common capital markets theme — namely, efforts by policymakers to increase the value of capital markets through such measures as raising corporate governance standards, deepening liquidity, and undertaking strategic reforms to build shareholder value.

With this background, Ms. Leung asked what effect, if any, deregulatory trends in the United States have had on individual markets in Asia Pacific and on the region as a whole. Has this impact been different in developed and emerging markets?

One participant said that his market continues to look to the United States for leadership in capital markets. Another member, however, noted that economic nationalism has disrupted investment flows in financial markets that, until now, have achieved global scope and integration. Moreover, capital flight issues have emerged as a result of sudden restrictions placed on the types of investments that certain US investors (possibly referring to state pension plans) are permitted to make.

As Ms. Leung observed, Japan and Korea have had two of the best-performing markets this year, in part by attracting investments being relocated in response to US protectionist measures. A CMPC member added that investors are now looking for customized solutions in several markets, ranging from India to Hong Kong SAR to Singapore.

Ms. Leung went on to pose a second question: Did CMPC members see a clear linkage between good corporate governance standards and the creation of shareholder value in the region?

One member noted the high level of concentration of share ownership in certain markets, as discussed in other sessions as well. The dominant shareholder, also called a principal shareholder, could comprise either a single family headed by a key decision maker or a group of individuals acting in concert (see Exhibit 1).

The policy challenge is to find ways to bolster the independence of boards and reduce the influence of principal shareholders on boards. One member suggested that CFA Institute could address the challenge by producing white papers and other publications to raise awareness. Ms. Leung has since published an annual general meeting (AGM) report, “Unlocking AGMs: From Votes to Voice in Asia-Pacific,” which identifies issues facing investors and other stakeholders.

Exhibit 1. Ownership Concentration in Asian Markets