Expert opinions

Investor protection is BaFin’s prime concern

Invest Foresight addressed a most reputed national regulator, Germany’s Federal Financial Supervisory Authority (BaFin) with a request for comments on some issues of financial and investment regulation.

As Dominika Kula, BaFin Press Officer, noted, “There are certain restrictions (the General Administrative Act, for instance) on financial and investment products that are exceptionally available for qualified investors and restricted for retail investors. This, for example, applies to securities with a denomination of €100K and higher. There are no legal prohibitions as to the products retail investors might want to buy. Besides that, BaFin has the competence to restrict or prohibit certain financial products if BaFin has significant investor protection concerns regarding this product. The restriction of the marketing, distribution and sale of financial contracts for difference (CFDs) is an example, as those contracts with an additional payments obligation may no longer be offered to retail clients.”

According to Dominika Kula, national regulation is most essential, as “It is of great importance to provide a level playing field in regard to supervision. It is mostly a question of policy and, for example, the Single Supervisory Mechanism as one pillar of the European banking union shows how European policy makers value this idea,” especially as nowadays “The financial market faces different challenges coming from different angles – may it be cybercrime and IT security or climate change and sustainability.”

Previous ArticleNext Article