It is planned that the marketing, distribution and sale of turbo certificates to retail investors residing in Germany will only be possible under certain conditions. The addressees of the general administrative act – intermediaries, issuers and providers – will have to adhere to the following requirements:

• The addressees will have to provide a standardised risk warning stating that seven out of ten retail investors incur losses when trading in turbo certificates. The risk warning must be included in all communications that serve the purpose of marketing, distributing or selling turbo certificates.
• The addressees will not be allowed to grant any bonus that incentivises retail investors to trade in turbo certificates. This will apply to monetary and non-monetary benefits. For example, it will not be possible to reduce or waive order fees for turbo certificates or to grant any new customer bonuses. Non-monetary benefits such as preferential customer service or gifts will not be allowed either.
• The addressees will have to perform an extended appropriateness assessment with regard to turbo certificates. Retail investors will have to complete a test regarding the key characteristics of such products and correctly answer at least six questions about trading in turbo certificates before they can purchase them. They will have to repeat this test every six months.

Turbo certificates: significant investor protection concerns

BaFin’s comprehensive market survey eregarding turbo certificates resulted in significant investor protection concerns. Many retail investors have incurred losses when trading in turbo certificates (74.2%). On average, they lost €6,358 each. In total, their losses amounted to €3.4 billion over a period of five years. In addition to the significant losses among investors, BaFin's concerns relate to the high complexity of turbo certificates as well as the practices used to market and sell them.

BaFin can restrict or prohibit the marketing, distribution or sale of financial instruments if significant investor protection concerns exist. The basis for such interventions is Article 42 of the European Markets in Financial Instruments Regulation (MiFIR) and section 15 (1) sentence 2 of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) in conjunction with Article 42 of MiFIR.

BaFin will be accepting opinions on the planned product intervention measure until 3 July 2025. Opinions can be submitted to the email address Anhoerung-Produktintervention@bafin.de.