Fixed-price transaction, also known as net operation
In off-exchange transactions between institutions, the usual form of settlement with the counterparty. A price is agreed in which all costs, including commissions, are already included. – In a transaction with a retail client, an institution must charge a price in line with the market. An institution is obliged to do this if it — does not forward client orders to a stock exchange or other trading venue for execution, but concludes them itself. If, however, a bank forwards a securities order to a trading center, it shall charge the customer separately for the items shown in the list of prices and services. However, this is not the case in a fixed-price transaction. Rather, in this case the institution concludes the transaction at a price above the prevailing market price in the case of a buy order from the customer and below the prevailing market price in the case of a sell order. The resulting margin is not shown separately by the institution in its settlement with the customer. – Consumer protectors, consumerists, consumer advocates: experts who inform consumers about risks, protect their safety, and reveal unfair practices) objected to this procedure because it was not possible to see at what price the bank had transacted the transaction, and what the bank charged in its own fees and commissions and those of third parties. — See bank fees, fixed fee, over-the-counter trading, flat rate. – Cf. BaFin Annual Report 2011, p. 183 f. (Abuse in fixed-price transactions: excessive margins) and the respective BaFin Annual Report, chapter “Supervision of Banks, Financial Service Providers and Payment Institutions.”
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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