Proposals

The proposals submitted are listed here.

Here you will find a list of additional contributions that we consider as inappropriate with regard to our competition for several reasons. For reasons of transparency, these proposals are open for discussion.

Please use the “comment” function to discuss the proposals.


Feb
27

Reverse convertibles

Reasons for the proposal: Which retail investor would probably have such a crazy idea: you have 10,000 euros to be invested securely for about a year while generating earnings in the form of interest. Given the current low interest rates one can perhaps expect an interest rate … mehr lesen


Feb
19

Financial Investments in Diamonds

Reasons for the proposal: Diamonds are promoted as a safe investment and the hardest currency in the world. They are sealed, certified and then sold to retail investors. It is forbidden to open the seal since the certificate becomes worthless in this … mehr lesen


Feb
15

Canada Gold Trust III (Closed-end fund)

Reasons for the proposal: The fund seems to be an investment in the raw material gold, but this product is actually a subordinated loan to the Canadian company Stanley Gold Mines Inc. – which was obviously founded only for this product. The company bought “exploitation rights” from its … mehr lesen


Feb
15

Alpha Certificates

Reasons for the proposal: Alpha Certificates are considered as market-neutral products. Here, the difference in the performance between two basic values is used ​​as a measure of profit. The basic values are often indices of stocks. However, many investors are not … mehr lesen


Feb
15

Forex online trading platforms for retail investors

Reasons for the proposal: ESMA warned investors against dealing with unauthorized firms and individuals offering foreign exchange investments, and alerted retail investors to the main risks involved in forex trading. On the other side, ESMA also warned retail investors against … mehr lesen


Feb
15

Unregulated Collective Investment Schemes (UCIS)

Reasons for the proposal: We want to encourage financial markets that work for financial users and the development of financial products that are socially useful. If a product is to be socially useful it should enhance the economic welfare of … mehr lesen


Feb
15

Bank Loans that do not contribute to the Gross Domestic Product

Reasons for the proposal: As I already warned before the the crisis arose in 2008 (for reference see e.g. my book “Neue Wirtschaftspolitik”, Vahlen Verlag, 2007), the only and always dangerous financial product – which should therefore be restricted - is … mehr lesen


Feb
15

Statutory Pension Insurance Schemes

Reasons for the proposal: A large part of the younger generation has to pay contributions into public pension schemes without knowing whether they will receive any pensions in the end and without the option to manage the money by themselves - apart … mehr lesen


Feb
15

Promissory Notes

Reasons for the proposal: The ‘Tax-avoidance Promissory Note’ is the ultimate dangerous financial product as the so-called ‘toxic asset’ behind unfunded debt in nationwide billions and global trillions in the 2008 Global Credit Crunch. Governments around the world rescued banks … mehr lesen


Feb
15

COREM (French private retirement savings product)

Reasons for the proposal: 1.The retirement savings area in general is where we find the biggest scale of consumer detriment, because of the high stakes and because of weak and inconsistent consumer protection of private pension savings products.Indeed, in 2012 … mehr lesen


Feb
15

CEEMEA SovX CDS Index

Reasons for the proposal: The EU’s ban of naked sovereign CDS exposure has dramatically reduced liquidity of the Western Europe SovX. The EU should now ‘finish the job’ with a ban on holding naked emerging market sovereign debt too. CDS … mehr lesen


Feb
15

National Employment Savings Trust (UK)

Reasons for the proposal: The UK Government’s implicit subsidy to a Trust Based scheme is distorting the UK market for retirement savings at a time when soft compulsion is being legally enforced. Furthermore, the Government sponsored generic guidance service (Money … mehr lesen


Feb
15

Certificates

Reasons for the proposal: Certificates are linked to ”if-then conditions” which open the door to speculation. With a bond, stock or a warrant the customer is always able to inform himself on the company and markets and to make a decision based on … mehr lesen


Feb
15

Shares in companies that deal with fossil fuels

Reasons for the proposal: Besides investments in gold, investments in companies that produce and distribute fossil fuels / energy sources (lignite and hard coal, natural gas, oil, uranium, plutonium) are supposed to be a safe financial investment. The dividends of shares in these companies … mehr lesen


Feb
12

RBS Sands Index TR equity Certificate

ISIN: NL0000816411 please see the following link for more information on the product: http://markets.rbs.com/EN/Showpage.aspx?pageID=10&isin=NL0000816411 Reasons for the proposal: This product tries to reflect the performance of the Sustainable Oil Sands TR Index. The index is designed to measure the performance of … mehr lesen


Feb
07

Open-ended real estate fund

Reasons for the proposal: Per definition, open-ended real estate funds are a long-term investment. [...] However, this is often not the case in reality, especially for institutional investors and private investors. As a result, open-ended real estate funds received considerable … mehr lesen


Feb
07

CS Euroreal – Postbank Real Estate Funds-

 ISIN: DE 0009805002 Reasons for the proposal: Promise in 2007: “Investment success and tax advantage” With an investment period of 5 years:-attractive yield-steady progress-tax advantagesClassification: safety-oriented Reality since 2011: no redemption of shares due to lack of liquidity! Proposal by: Barbara … mehr lesen


Feb
07

Weather derivative

For examples and details see: http://www.eurexchange.com/exchange-de/produkte/wed/ Reasons for the proposal: Insurances (especially mutual insurances) are reasonable when used to insure against high individual risks. Normally, the insurance companies are legally obliged to deposit securities and sell them in the case of an incident. This … mehr lesen


Feb
07

Rothmann & Cie. Leasing Funds (e.g. ALAG, Albis Capital, Leasetrend)

Reasons for the proposal: The nominated products are leasing funds that are now liquidated in bunches. The customers lose the money they invested. In the case of ALAG the company is liquidated(after there is no invested money left)  – without filing … mehr lesen


Feb
05

Exchange Traded Funds (ETF)

Reasons for the proposal: First of all, I would like to argue that the way that ETF’s (exchange traded funds) are currently packaged and  sold is dangerous, and this link, from a think tank called the New Economics Foundation,  describes it better than I ever could myself: http://www.neweconomics.org/publications/exchange-traded-funds Proposal by: Ian Marder


Feb
05

Early intervention bonds

Reasons for the proposal: my strong proposal is ‘early intervention bonds’ in the UK, which give the City control over essential social services like homelessness, addiction or rape prevention. Allowing financial markets to speculate on social welfare is terrifying enough. … mehr lesen


Jan
31

CoCo Bonds, CoCo Bond funds

WPK (security code number): WKN A1HFAF, WKN BC5K6T, A1H88F Reasons for the proposal: These structures, promoted and encouraged by bank regulators (!!), offer retail investors an attractive yield but IF (when?) the issuing bank suffers a fall in its Tier … mehr lesen


Jan
28

Renewable energy funds

Reasons for the proposal: Renewables, most notably wind and solar power, rely heavily on governement subsidies. The danger lies in the regulatory uncertainity, as the subsidies may end tomorrow. Proposal by: Johan Schoone  


Jan
25

Collateral Tranformation

„Collateral Lending“ – relates to the provision of collateral when a customer and a bank agree on setting up a derivative transaction. In case a customer of a bank does not have a sufficient amount of eligible collateral, the bank can accept collateral … mehr lesen


Jan
25

Citigroup Global Markets Dt. XMiniS O.End DAX/XDAX 7890

ISIN: DE000CG0U3X9 Reasons for the proposal: This product is a leverage Leverage Product, where the today rate of the leverage is 85 %!As a rule, knock-out products can be used to speculate on the rising or falling prices of any … mehr lesen


Jan
25

Overdraft facilities

Reasons for the proposal: Interest paid on overdraft is too high in comparison to the low interest rates banks have to pay for refinancing. Proposal by: Erich Hinderer


Jan
25

Partial-hedged certificates

link to the product: http://www.vb-mosbach.de/privatkunden1/boerse-wertpapiere/zertifikate0/Teilabsicherung.html (German) Reasons for the proposal: The issuer of the product is a “Volksbank” (regional cooperative bank in Germany) in which customer have a higher degree of trust – similar to “Sparkassen” (regional savings banks in Germany). … mehr lesen


Jan
25

Unsecured Government Bonds

Reasons for the proposal: Government bonds are one of the most dangerous financial products in history for private investors (and not seldom even for their issuers). This product is often advertised with the promise of the highest degree of security possible … mehr lesen


Jan
22

Payment-in-kind notes (PIK)

PIK are bonds or preferred stock whose coupons (or dividends) are in the form of additional bonds or preferred stock. They are often use to finance takeovers. These notes allow a company to borrow more money without immediate concerns about cash … mehr lesen


Jan
22

Shares of listed investment companies (“LIC”)

The LIC share is a product, offered by the listed investment companies (LIC), to small investors. This product is recommended by financial advisers, included in pension plans, and so forth. Reasons for the proposal: In brief, the main problems these companies pose … mehr lesen


Jan
22

Private pension schemes (Germany)

Reasons for the proposal: Employees are attracted by relatively small contributions. Only small providers of the schemes make profits… (arguments are surely known). The public pension scheme was / is massively threatened. Efforts to establish a statutory pension scheme, which is financed … mehr lesen


Jan
22

Closed-end ship funds

Reasons for the proposal: Aims at reaching private investors / pensioners by pretending secure pay-offs But: – due to long construction period risk of hog cycles on the markets – large proportion of debt capital is supposed to leverage returns but … mehr lesen


Jan
21

EUSIPA Product Type: Warrant (2100)

As an example: http://keyinvest-at.ubs.com/media/products/Bucket-40/CH0201066039-5323618.pdf Reasons for the proposal: Although the risk is explained, I believe that the product is dangerous due to its influence on financial markets. The same applies to “Spread Warrant (2110)” and “Warrant with Knock-Out (2200)”. Proposal by: … mehr lesen


Jan
21

HCI Holland XII (closed-end property funds)

Reasons for the proposal: Shares in closed-end property funds can be very dangerous – at least for private investors – because they are advertised as being a secure investment although the shares are not accepted as collateral and cannot be … mehr lesen


Jan
21

Credit Suisse IRIS Balanced (CSGG) 08/13

ISIN: CH0035956694 Reasons for the proposal: Concentration of insurance risks from natural disasters (earthquakes, hurricanes, flood), plane crashes in a certificate (so-called CAT-Bond). Since these risks are difficult to calculate and increased in the past years, the risks are not factored in … mehr lesen


Jan
18

Pension System Design (Bulgaria)

Description of the pension system design for the Bulgarian mandatory pension pillars: 1. Public Pensions are the 1-st pillar: PAYG system (aging gap, not in the scope of this complaint, please also note aging gap can cannot be closed by … mehr lesen


Jan
18

Final salary pension schemes (UK)

Reasons for the proposal: Final salary pension schemes of companies. A company either appoints staff to administer the scheme or contracts it out. Companies concentrate their attention on their main product and do not consider whether they are qualified to … mehr lesen


Jan
18

Payday loans

For example offered on: wonga.com Reasons for the proposal: I think the most dangerous financial product that has recently arisen in the UK is the payday loan.  These loans are granted online, within minutes, to people who are seeking funds … mehr lesen


Jan
18

Loans with residual debt insurance

For example offered by: Santander Consumer Bank, Mönchengladbach Reasons for the proposal: Expensive loans due to residual debt insurance – immeasurable harm? The annual percentage rate of charge (APR) has – similar to a price tag on goods - the function to … mehr lesen


Jan
18

“Third-order derivatives” (i.e. an option on an option on an option)

Reasons for the proposal: This submission concerns a generic class of dangerous financial instruments, and not a particular instrument. The class includes what I would term third-order derivatives. A first-order derivative (e.g. an option) is well understood and the consequences … mehr lesen


Jan
18

Vulture Funds

Reasons for the proposal: A country can have its debt bought by a vulture  and then be charged many many times the original debt leading to a countries further destitution and starvation for her peoples. This must be the most … mehr lesen


Jan
18

Credit cards with high interest rates (up to 18.74 %)

as an example: Barclay Visa and Master Card (interest rate is stated in % per month) http://www.barclaycard.de/index.php?page=Kreditkarten_Ueberblick Reasons for the proposal: – interest rates are far too high, especially when considering the current interest rates of central banks – in case … mehr lesen


Jan
18

Credit Default Swaps (CDS)

Reasons for the proposal: CDS are insurance-like contracts as a protection against the default of loans that are made tradeable by the securitisation of assets. In principle, CDS aim at limiting the creditor´s risk of a default of loans or government bonds. Due to the securitisation … mehr lesen


Jan
18

Warranty Certificates

Reasons for the proposal: Due to a capital guarantee safety-oriented investors are under the illusion of security although there exists a risk of default of the issuer (potentially leading to a total loss). Moreover, there is a high degree of intransparency with … mehr lesen


Jan
18

DWS Go Uranium Exploration Index Certificate

ISIN: DE000DWS0G81 Reasons for the proposal: The focus is on companies that deal with the exploration and extraction of uran and profit from the current tight supply situation. Do we not have enough of all the nuclear waste that will contaminate … mehr lesen


Jan
17

Binary options

“Binary option” as an example for an exotic option → derivative which is derived from an option and accessible for private customers Reasons for the proposal: – instrument is not needed by the real economy, only used for speculative reasons – … mehr lesen


Jan
16

Financial products based on food speculation, e.g. DB Platinum Agriculture Euro R1C

As an example for all other products speculating with changes in food prices. This particular product speculates with price developments for:Wheat, corn, sugar, soybeans, cotton, coffee, cocoa ISIN: LU0338689523 Reasons for the proposal: This is the most dangerous financial product becauses … mehr lesen


Jan
16

Short Term European Papers (STEP)

Reasons for the proposal: Trading with Short Term European Papers (STEP) on the so-called “STEP market” is not allowed for the public. However, since STEP products are accepted by the ECB as eligible assets, an abuse cannot be excluded. For example, … mehr lesen


Jan
16

CFD (Contracts For Difference)

for example Rough Rice Futures,see: http://www.etxcapital.de/market-range/commodities/ Reasons for the proposal: VERY RISKY and under certain circumstances VERY EXPENSIVE – leveraged structure, dangerous since investors have to determine leverage on their own! – investors are attracted to “shadow stock exchanges” (Chi-X or Turquoise) → over the … mehr lesen


Jan
16

Life insurances, especially endowment life insurances

Reasons for the proposal: - very long duration of the contract – extremely high charges for the agent over a long period of time (e.g. 10 years) – an accordingly high cost burden for the investor / customer – an accordingly … mehr lesen


Jan
16

Collateralized Debt Obligations (CDO), especially synthetic CDO

Reasons for the proposal: – high risk of default due to the tranche with the lowest rating, subordinated in case of default! – multiple securitisation (and dividing it into seperate tranches) leading to the illusion of a secure refinancing instrument → … mehr lesen


Jan
16

Abacus 2007-AC1

Reasons for the proposal: The investment bank Goldman Sachs created Abacus by pooling several securities based on US real estate loans. (A classical CDO derivative) The Abacus securities should have increased in value during the boom on the US real estate market. … mehr lesen


Jan
15

Water funds

as an example: https://www.fonds-im-vergleich.de/finanzprodukte/fonds/wasser-fonds/ Reasons for the proposal: The privatisation of the water market violates human dignity, will cause struggles for resources leading to wars and destroys the water resources in the long run. Proposal by: Toni Thalmaier


Jan
15

Solit 2 Gold & Silber GmbH & Co. KG

Offered by: Solit Kapital GmbH Hamburg  Reasons for the proposal: With Solit 2 Gold & Silber GmbH & Co KG investors can invest in silver that is physically deposited. The investors become limited partners of the company and are therefore granted … mehr lesen


Jan
15

DB Kompass Life 1 – 4

Offered by: Deutsche Bank AG Reasons for the proposal: This product violates human dignity by betting on the death of life insurance customers, check for example: http://www.kanzleimitte.de/DB-Kompass-Life-3-Fonds–96-Deutsche-Bank-wettet-gegen-die-Anleger-_484.htmlhttp://www.thomas-dyhr.de/?p=2694https://www.db.com/ir/de/download/HV2012_Gegenantraege_de_1805.pdf?dbiquery=null%3AKompass+Life However, I am not sure whether this product was already taken from the market by … mehr lesen


Jan
15

Foreign currency loans payable upon final maturity

Reasons for the proposal: This product does not seem to be threatening at first sight. However, risk is to be found in the simplicity of the product. In Austria, this product was advertised by banks in the 90s for people building their own houses. Austria … mehr lesen