Turbo certificates: what the BaFin general administrative order provides

Basis and addressees

The basis is a product intervention measure that BaFin (Federal Financial Supervisory Authority) issued on 15.10.2025 as a general administrative order (Allgemeinverfügung), based on Art. 42 MiFIR and § 15 WpHG (German Securities Trading Act); following consultation with the industry, the original implementation period was extended from three to eight months. The occasion was a five-year market investigation by BaFin: according to this, 74.2 per cent of retail investors with turbo certificates lost money, on average 6,358 euros per investor, with total losses of more than 3.4 billion euros. In addition to the complexity of the products, the main criticism concerned marketing and distribution practices.

The general administrative order is addressed to issuers, providers and intermediaries — in addition to the issuing banks, therefore also to custodian banks and neobrokers. It is not a distribution ban, but it links the purchase to three obligations.

Risk warning, knowledge test, ban on incentives

First, a uniform risk warning must appear immediately before every purchase and in all advertising: “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.” Second, before the purchase, investors must pass a standardised knowledge test with at least six multiple-choice questions on how the product works, with exclusively correct answers; the result is valid for a maximum of six months, after which the test must be repeated. It is in addition to, but does not replace, the appropriateness assessment under MiFID II. Third, no monetary or non-monetary benefits may be granted in connection with the purchase, expressly including volume discounts — BaFin cites reduced order fees and new customer bonuses as examples.

The European Securities and Markets Authority ESMA considered the measure justified and proportionate, but expressed doubts about its effectiveness. It was particularly critical of the design of the knowledge test, which may be repeated as often as desired and in which incorrect answers are resolved immediately. It also recommended that BaFin pay particular attention to advertising and to inducements paid to brokers — according to ESMA, issuers sometimes pay brokers between 3.50 and 13.40 euros per transaction.

Investors' claims

Whether investors can derive claims of their own from an infringement of the general administrative order has not yet been clarified by the courts, but previous case law indicates a direction. The BGH (Federal Court of Justice) has not recognised the conduct-of-business rules of §§ 31 et seq. WpHG as protective laws (Schutzgesetze) within the meaning of § 823(2) BGB (German Civil Code), because they are primarily of a supervisory law nature and have no independent significance for the law of damages going beyond contractual duties to inform and advise (BGH, judgment of 19.2.2008 – XI ZR 170/07; judgment of 17.9.2013 – XI ZR 332/12). The CJEU (EuGH) has confirmed that EU law does not require civil liability for such infringements (judgment of 30.5.2013 – C-604/11). In the case of the turbo general administrative order, there is the additional point that, under Art. 2 EGBGB (Introductory Act to the Civil Code), only a legal norm can be a protective law, whereas the general administrative order is an administrative act — anyone wishing to base a claim in tort on it must therefore show that the empowering provision, as specified by the order, is intended specifically to protect the individual investor. A point in favour of this is at least that the knowledge test and the ban on incentives apply directly to the individual purchase and are expressly intended to prevent losses by retail investors.

The route via the contractual relationship is more obvious. In the view of the BGH, too, supervisory obligations can give concrete form to the content and scope of contractual obligations. This is particularly obvious in the case of the knowledge test, because the broker may not execute the purchase at all without a passed and valid test — if it executes it nevertheless, a breach of duty under the custody account agreement pursuant to § 280 BGB may be considered. Whether the loss is caused precisely by this breach of duty depends on whether the investor would have passed the test and must be clarified in the individual case; what data the broker has stored about the test and orders can be ascertained via the right of access under Art. 15 GDPR.

The ban on incentives, in turn, regulates market conduct towards consumers. Infringements, such as fee promotions for leveraged products, can therefore be pursued by consumer associations and competitors with claims for injunctive relief as a breach of law under § 3a UWG (German Act against Unfair Competition). By contrast, § 3a UWG does not give the individual consumer a claim for damages of their own, because § 9(2) UWG expressly excludes this provision.

Assessment

The general administrative order is an intervention in distribution, not a ban: it obliges brokers and issuers to provide a risk warning, conduct a knowledge test and refrain from purchase incentives. How far investors can derive claims of their own from it will first have to be clarified by the courts — according to the BGH's previous line, there is little to suggest independent liability in tort; the contractual approach appears more viable where a broker has omitted the prescribed steps before the purchase. Anyone who purchased turbo certificates after 16 June 2026 should keep the order documents and keep an eye on the limitation period, which is generally three years from the end of the year in which knowledge was obtained (§§ 195, 199 BGB).

This article is for general information purposes only and does not replace advice in an individual case.