Cross-Border Retail Investing in Europe Grew 39% as the Number of Brokers Declined: ESMA

The number of retail investors using cross-border investment services across the EU and EEA jumped 39% between 2022 and 2024, even as the number of firms providing those services edged down from 380 to 370.

The figures that come from a new follow-up report published by the European Securities and Markets Authority (ESMA) suggest that cross-border retail investing is becoming increasingly concentrated, with fewer firms serving a much larger client base.

ESMA said the comparison should be treated as a proxy because its data collection methodology was refined during the period, but it concluded that cross-border investment activity continues to grow in both scale and complexity.

A Larger Market Concentrated in a Handful of Jurisdictions

ESMA’s 2024 dataset covers firms serving more than 50 retail clients in a host member state, meaning it does not capture the entire cross-border retail investment market under MiFID II.

Within that scope, the market comprised 370 firms across 30 EU/EEA jurisdictions serving around 10.5 million retail clients. Investment firms accounted for 59% of providers, while credit institutions made up the remaining 41%.

The market also remains heavily concentrated. The six jurisdictions examined in ESMA’s review - Cyprus, Germany, Luxembourg, the Netherlands, Malta and Czechia- accounted for 220 firms serving more than six million retail clients, or almost 60% of the EU/EEA market.

Cyprus, Luxembourg and Germany together accounted for almost half of all firms operating cross-border, while Cyprus and Germany alone accounted for almost half of all retail clients served across borders.

• Europe Has No Licensed Prediction Markets. ESMA Just Raised the Entry Bar
• ESMA Unveils Single Framework to End Duplication in Trade Reporting
• How Some Traders Are Exploiting Negative Balance Protection

Complaints Rise as Supervisors Expand Oversight

The six jurisdictions reported 7,128 complaints relating to cross-border activities in 2024, representing nearly 65% of all complaints received across the EU and EEA. Germany accounted for 4,936 complaints and Cyprus for 1,103.

However, ESMA said complaint data should be interpreted with caution. In Germany, one investment firm alone accounted for nearly two-thirds of all reported complaints, illustrating how individual firms can skew national statistics.

The regulator also noted that complaint reporting is based on a broad definition of a complaint and may differ between firms, meaning statistical outliers are possible.

Beyond the market data, ESMA concluded that national regulators have made tangible progress since the original 2022 peer review.

According to the report, authorities strengthened authorisation processes, improved data collection, integrated cross-border indicators into risk-scoring models and expanded monitoring of firms operating across borders. Most also increased the use of data-driven supervision to determine supervisory priorities and inspections.

ESMA nevertheless said supervisory practices and resources must continue to evolve alongside the expanding market.

For firms operating under MiFID passporting, the findings indicate that regulators are placing greater emphasis on cross-border business models as client numbers grow and supervisory scrutiny becomes increasingly risk-based.