Consumer protection
Bafin tightens rules for trade in turbo certificates
Consumer advocates consider certificates to be opaque and expensive, sometimes private investors lose a lot of money. The financial supervision now wants to restrict the trade in certain products.
The financial supervision Bafin wants to protect private investors from losses in certain securities with stricter rules. Marketing, sales and sale of so-called turbo certificates are to be restricted, as the Federal Agency for Financial Service Supervision announced.
With these papers, which are equipped with a lever, intensified price fluctuations, investors had lost a lot of money. In the “Handelsblatt” interview, Thorsten Pötzsch, who is responsible for the security supervision in the Bafin directorate: “This is closer to gambling than in long-term financial investment.”
According to the BaFin, private customers in Germany lost a total of more than 3.4 billion euros in the trade of turbo certificates from 2019 to 2023 – an average of 6,358 euros per customer. “Many small investors are not completely clear about the risks of these products, which is obviously,” says Pötzsch.
Mandatory warning of possible total loss
Turbo certificates belong to the group of structured securities. These are bound to certain underlying values such as stocks or raw materials and enable investors above average price gains. At the same time, however, there is a risk of above -average losses or a total failure.
In the future, BAFIN obliges providers to warn customers of turbo certificates from trading turbo certificates as by default. In addition, the providers must use a test to check whether interested small investors have sufficient knowledge of trade in such securities. Purchase incentives such as bonus payments or reduced order fees are also prohibited when selling these products.
Critics consider the papers to be complicated and expensive
Consumer advocates have long been critical of the booming certificate market: they consider the products that were temporarily sold on a large scale by savings banks and cooperative banks, among other things, to be too complicated and comparatively expensive for customers.
In addition, structured bonds would also be sold to customers because of their attractive sales commissions of money houses who only asked for classic interest rate products such as daily or fixed deposits.
Prohibition for BaFin no option
From Pötzsch’s point of view, a total ban on Turbo certificates would not be relatively or offered: “In my knowledge, there is no such extensive intervention in the market even in other European countries.”
According to him, there are 20 providers of Turbo certificates in Germany, mostly daughters of foreign companies. The five largest institutes would stand for around 75 percent of the market. “The savings banks have no turbo certificates on offer,” added Pötzsch.
dpa
Source: Stern
