Overview

• Germany’s financial regulator Bafin has introduced stricter rules on turbo certificates, high-risk structured securities that amplify market gains and losses.
• The new measures require pre-trade total-loss warnings and knowledge tests to ensure retail investors understand the risks involved.
• Sales incentives such as bonus payments and reduced fees are now prohibited to curb aggressive marketing practices.
• Between 2019 and 2023, German retail investors lost over €3.4 billion trading turbo certificates, averaging €6,358 per investor.
• Bafin rejected a total ban on turbo certificates, citing proportionality concerns and the lack of similar measures in other EU countries.