General administrative order restricting the marketing, distribution and sale of turbo certificates to retail investors enters into force
On 16 June 2026, BaFin’s general administrative order restricting the marketing, distribution and sale of turbo certificates enters into force. It sets out strict conditions for all distribution activities involving turbo certificates towards retail investors.
Table of Contents
Turbo Certificates: Leverage and Knock-Out Threshold
Turbo certificates are characterised by two key features: leverage, which enables investors to participate disproportionately in price movements of the underlying asset, and the knock-out threshold (also referred to as the knock-out barrier). If the underlying asset reaches (“breaches”) this threshold, the certificate expires and the investor suffers an immediate total loss. Any subsequent development of the underlying asset during the original term is irrelevant.
Risk Warning Like on Cigarette Packs
All distribution and marketing information must contain the following risk warning prescribed by BaFin:
On average, 7 out of 10 retail investors incur losses when trading turbo certificates. Turbo certificates are highly risky products and are not suitable for long-term investment strategies.
BaFin specifies in meticulous detail how the risk warning must be displayed or, in the case of verbal communications, communicated orally.
Turbo Certificate Diploma
Before purchasing turbo certificates, retail investors must first complete and pass a knowledge test. The test consists of at least the six multiple-choice questions prescribed by BaFin. The test is only considered passed if all questions specified by BaFin are answered correctly. BaFin does not impose a limit on the number of failed attempts.
A successfully completed test remains valid for a maximum period of six months. Once this period has expired, the retail investor must retake and pass the test before purchasing additional turbo certificates.
No Incentives
BaFin expressly prohibits the granting of benefits in connection with the acquisition of turbo certificates. In particular, volume-based discounts may not be offered.
Entire Distribution Chain Obliged, Including Finfluencers
The addressees of the general administrative order are intermediaries, issuers and providers of turbo certificates, meaning all financial service providers within the value chain.
Indirectly, however, the circle of obligated parties is much broader. Intermediaries, issuers and providers must ensure that all third parties promoting turbo certificates on their behalf also include the required risk warning. In this context, BaFin explicitly refers to finfluencers (for the current regulatory discussion concerning finfluencers, see here).
Background: Limited Understanding and Significant Losses
The background to BaFin’s approach is a comprehensive market investigation and MiFIR reporting data relating to turbo certificates. According to these findings, nearly three-quarters of retail investors trading turbo certificates incurred losses over a five-year period. Retail investors with particularly high trading activity suffered overall losses in up to 90% of cases. The average loss exceeded EUR 6,000 per investor.
On average, more than one-fifth of retail investors purchased turbo certificates despite lacking sufficient knowledge and experience to understand and assess the associated risks. This is where financial service providers become distinguishable: while some providers recorded less than 5% of retail investors with a “negative appropriateness assessment”, for other market participants this applied to nearly half of all purchasers of turbo certificates.
