Risk disclosure statement

A document that states as clearly as possible the risks and uncertainties associated with a particular option transaction or forward contract. It is usually accompanied by a detailed statement of the fees and sometimes taxes involved. Such a risk report is sent by the leading brokers to the (private) customer without his request; mainly also to avoid subsequent legal disputes. In Germany, the duty to provide information on derivatives transactions is prescribed by law, and this is monitored by the Federal Financial Supervisory Authority. – In a securities sales prospectus, all risks associated with the purchase of the security must be clearly presented in a special section containing exclusively this information. – See Investor Information Obligation, Disclosure Obligation, Derivatives Information Obligation, Derivatives Code, Contingent Loss, Informational
Overcharging, proportionality, double. – Cf. BaFin Annual Report 2007, p. 161 (publication of prospectuses is refused because no clear risk disclosures), BaFin Annual Report 2008, p. 56 (regulations for liquidity risk management), pp. 92 et seq. Risk reports for insurance companies), BaFin Annual Report 2009, p. 101 ff. (Evaluation of risk reports: detailed presentation), BaFin Annual Report 2010, p. 108 ff. (Overview of particularly significant risks; new requirements for risk reporting), and the respective BaFin Annual Report, chapter “Supervision of insurance companies and pension funds.”

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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