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How do you recognize gray capital market products?

The offers are often characterized by the fact that

  • Lure providers with high interest rates or returns above the general market level or even pretend to be able to achieve returns in the same way as institutional investors,
  • the alleged security of the investment is advertised,
  • Investment decisions should be influenced by positive or ethically correct investment objects (for example "green investments").

The offers on the gray capital market are very diverse. Again and again, providers are inventing new investment opportunities. That is why they cannot be enumerated conclusively. For example, offers from the following areas can be named:

  • Corporate investments
  • Profit participation rights and other hybrid forms of bonds
  • Order bonds
  • Crowdfunding (crowd financing)
  • Loans with subordination agreement (often only recognizable in the small print)
  • Direct investments, for example in containers, wood or precious metals
  • Purchase-and-lease-back contracts
  • Tokenized stock rights
  • Blind pool constructions.

Not all offers from the gray capital market are dubious per se. However, investors should carefully consider their investment decisions and be aware that there may be special risks.

At a glance: white, black and gray capital markets

The white capital market includes those institutions, financial service providers, payment service providers, capital management companies and insurance companies that have a license for their activities in accordance with the relevant supervisory laws. They are subject to ongoing supervision by BaFin. The counterpart is the illegal black capital market, whose actors carry out transactions that require authorization without the required permission from BaFin or even conduct prohibited transactions. The gray capital market, on the other hand, is the sum of market participants and offers that do not require BaFin approval and are therefore not subject to its supervision.

What are the risks for you as an investor?

  • No systematic product control.
  • No control of the seriousness and creditworthiness of the providers, initiators and managers.
  • No review of the economic viability of the business model.
  • Often considerable risk up to the total loss of your invested capital and personal bankruptcy.
  • There are only very limited sales opportunities under private law, as there is usually no admission to trading on a regulated or other equivalent market.

How can you find out about offers and providers?

Information is provided, for example, in the prospectus or the securities or investment information sheet (the latter in the following for short: information sheet). Providers have to create these for securities and investments - however, there are exceptions. Brochures are very extensive. But even if it seems tedious, carefully read the investment conditions and financial figures contained therein as well as the information on the risks of the investment, the investment strategy and the planned use of funds.

Always keep in mind that BaFin does not check a prospectus or information sheet to determine whether the investment is valuable or whether the provider is reputable and financially sound. The supervisory authority does not check whether the information in the prospectus or information sheet is correct. If BaFin approves a prospectus or permits the publication of an information sheet, this means that the document contains the legally required minimum information on the provider and the product. However, it does not mean that BaFin has approved or even approved the company or its business model. The examination of brochures or information sheets is not a seal of approval and not a permit to do business - even if providers tell you otherwise.

If there is no prospectus or information sheet approved by BaFin whose publication has been approved by BaFin, you should be particularly careful. As a rule, you will then only receive a little information about the company and the plant. You should therefore always find out more from other sources. Pay attention to where the information comes from and whether the source of information is known, reputable and neutral. The less meaningful information you get about an investment, the more careful you should be.

You can also obtain information on all aspects of investing from the Federation of German Consumer Organizations and the local consumer advice centers. On the BaFin website you can also check whether a company is under the supervision of BaFin and therefore does not belong to the gray capital market. You can also access information about the prospectuses and information sheets for investments and securities deposited with BaFin there.

What Can You Do When You Have Lost Money?

With many products on the gray capital market, you can suffer considerable financial losses - even with serious offers. You have to take this risk into account. However, if you believe that you are being made a dubious offer or have fallen for a fraudster, report it to the police or prosecutor as soon as possible. You can also get advice from the consumer advice centers on whether and how you should proceed. Of course, you can also contact us. BaFin then examines whether it is introducing regulatory measures. As a rule, BaFin is not allowed to inform you about this due to its duty of confidentiality. In addition, it may not assert any claims for damages under civil law in your interest or decide on them.

Further information

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