Derivative information requirement
In Germany, a regulatory requirement for risk information in derivatives transactions. In particular, information must be provided on – the underlying, – the economic relationships and functioning of the products such as, above all, the significance of the term for the premium, the type of exercise, the leverage effect, the liquidity and volatility of the market and, where applicable, the writer risk) – the return, – the price risk, – the currency risk, and – the credit risk. The duty to provide information is explained in detail and monitored by the German Federal Financial Supervisory Authority (BaFin) by means of appropriate guidelines. – Customers often react angrily to corresponding instructions and sign written templates without further ado in the “marked place” – Obligation of trading to gradually (gradually) settle all derivatives transactions via a central counterparty or at least report them to a central office as of February 2014. The European Securities and Markets Authority has published detailed provisions on this. – See Investor Information Requirement, Clarification Requirement, Financial Stability Board, Derivatives Transaction Clearing Requirement, Derivatives Transaction Reporting Requirement, Derivatives Code, Derivatives Regulation, IAS 39, Information Sheets for Financial Instruments, Information Requirement, Over-the-Counter Trading, Risk Report, Risk Monitoring, Classified. – Cf. BaFin Annual Report 2005, p. 146 (reporting obligations for funds under the Derivatives Ordinance), Financial Stability Report 2012, p. 92 et seq. (over-the-counter derivatives market since 2003; regulatory issues), BaFin Annual Report 2013, p. 163 (new requirements for OTC derivatives transactions under the amended Derivatives Ordinance).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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