Germany's BaFin Implements New Rules for Turbo Certificates

The German Federal Financial Supervisory Authority (BaFin) is introducing new rules to increase transparency for retail investors trading highly speculative leveraged products. This product intervention measure, concerning turbo certificates, will take effect from June 16, 2026. It governs the marketing, distribution, and sale of these certificates to retail investors in Germany.

The regulatory action follows a comprehensive BaFin market study, which found that three out of four retail investors lose money trading turbo certificates. Key changes for investors include the mandatory use of a standardized risk warning on all related notices and order forms. Furthermore, intermediaries, issuers, and providers are prohibited from offering bonuses or incentives for trading these products.

Retail investors will also be required to pass a test on "basic turbo knowledge" at their custodian bank before any purchase. This knowledge assessment must be repeated every six months to ensure continued investor awareness of the associated risks.