Response to the AFM consultation on restriction on sale of turbos to retail investors

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FESE Members fully share the AFM’s objective of safeguarding investor protection and agree that some product intervention measures at European or national level might occasionally be necessary for specific products.

We believe, however, that restricting the sale of turbos to retail investors would be an inappropriate and disproportionate measure.

Securitised derivatives, including turbos, have a long history and cater to the investment needs of the retail investor, allowing for a more sophisticated risk/return approach to their investments. In the case of turbo certificates, experienced investors use them as a tool to hedge their portfolio risks. With above-average experience in investing and risk-taking, they are well-equipped to weigh chances against risks and to assess the characteristics and the complexity of these products.

To facilitate transparency, regulators and policy makers have established standards for product information which take into account what is appropriate for consumers and their demands. The information is comprehensive and easy to understand while offering a sufficient level of precision and depth in a standardised format. Based on this, retail investors should continue to have wide access to different types of investment products, including turbos.