Product intervention: BaFin consult on prohibiting the marketing, distribution and sale of futures with additional payments obligations to retail clients in Germany

On 17 February 2022, BaFin (the Federal Financial Supervisory Authority of Germany) published a consultation on its proposal to prohibit the marketing, distribution and sale of futures with additional payments obligations to retail clients in Germany.

An additional payment obligation for the purposes of this arises if the capital held by the investor (capital paid to the intermediary firm in connection with futures trading) is insufficient to compensate for the losses incurred, even after any forced closing out or the liquidation of other positions, and the investor must make good these losses from their other assets.

It is important to note that any voluntary increase in the variation margin by the investor to avoid forced closing out of open positions therefore will not constitute an additional payment obligation for the purposes of this intervention.

The proposed measure will be adopted under Article 42 of Regulation (EU) No. 600/2014 (MiFIR).  If your firm may be impacted by this proposal you should notify your usual supervisor at the Central Bank as soon as possible.