Regulatory Alerts2022-09-30 | General Administrative Act - Product intervention regarding FuturesBaFin General Administrative Act on Product Intervention Regarding Futures
The German Federal Financial Supervisory Authority (BaFin) has issued a General Administrative Act prohibiting investment firms from marketing, distributing, and selling futures to retail clients domiciled in Germany unless specific exceptions apply. Effective January 1, 2023, the restriction targets contracts exposing retail clients to unlimited additional payment obligations beyond their deposited margin, while exempting hedging transactions, offsetting trades, and agreements that cap losses to the initial deposit. This intervention addresses significant investor protection concerns arising from leverage, margin calls, and forced liquidations that frequently cause retail clients to incur losses exceeding their initial capital.
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