The Executive Committee of the Spanish National Securities Market Commission (CNMV) has agreed to initiate disciplinary proceedings against DEUTSCHE BANK, SAE, for the advisory service provided to Spanish clients in relation to high-risk currency derivatives – in particular the so-called Target Profit Forwards and Pivot TPFs.
The conduct, according to the regulatory authority, constitutes a very serious violation defined in Article 284.1 of the recast text of the Spanish Securities Market Law, approved by Spanish Royal Legislative Decree 4/2015, of October 23 (hereafter LMV) , for breaching, in a non-occasional or isolated manner, the obligations of due diligence and transparency established in article 208 of the above-mentioned legal text, regarding the obligation to notify customers defined in articles 209, 210 and 211 thereof and in its implementing regulations, within the period from 1 January 2018 to 31 March 2021.
Deutsche Bank’s conduct also allegedly constitutes a very serious breach defined in Article 283.12 of the LMV, for breaching, in a non-occasional or isolated manner, the obligations of due diligence and transparency and acting in the best interests of its clients, set out in Article 208ter and its implementing regulations, within the period from 1 October 2018 to 31 March 2021.
These disciplinary proceedings are initiated for facts also identified by internal investigations conducted by the Deutsche Bank Group, which owns the party being disciplined. Potential non-compliances with the applicable regulation were identified in the context of OTC structured derivatives, in particular with regard to Spanish clients.
It is particularly important to recall that entities trading or providing advice in relation to financial instruments must inform investors in a balanced, clear, impartial and non-misleading manner about the characteristics, operation, risks and costs associated with these instruments. products, especially when they are very complex; and must always act in the best interests of clients by advising products that suit their investment needs and objectives, and particularly their risk profile.