Certificates: What is it? The buyers have not understood what you have purchased. The sellers have not understood what they were selling. The issuers have not understood it in the majority of what they have built. The oversight bodies and Auditors have understood nothing at all.\” (cited 6th day of banking and capital market law banking by Prof. Dr.
Jurgen Singer, University of Leipzig, Professor, Nov. 19, 2009) Certificates are currently the absolute favorite and fashion products in the investment business. The certificates market is booming despite Lehmann went bust and the today’s times of the uncertain financial situation. Reason enough, this highly complex artifact to illuminate. Here the attempt of a simple statement: what is a certificate and how does it work? \”\” Certificates are artifacts, they are \”the editors of certificates, mostly banks, designed\” by the so-called issuer so. They can be designed for every type of investor, by extremely security-conscious and risk taker. Certificates represent a special kind of a security and work as follows: the investor acquires a relevant document in the form of a certificate by paying a certain amount to the issuer. This has a fixed duration and guarantee a refund in many cases.
This certificate is in turn related to so-called base values. Underlying assets are E.g. shares, commodities, or even combination values such as equity indices or even fixed-income securities. Investors buy so, simple a permission certificate, they benefit from the performance of the underlying terms, leaves, without that they will need to purchase the stock, the raw material or the appropriate paper directly. In principle, most certificates are nothing more than betting. You bet with the Bank, for example, that a share, or even raw materials or stock market indices so called base values to develop in a certain way\”so the Munich financial consultant Svea cuddle. and whichever one is how risk taker, you can hedge this bet… this Are in reality mostly a so-called capital guarantee.
