Börse Berlin makes Investment Risks more transparent
It can be hard to assess the risks of an investment in shares. Often one can observe two extreme reactions to this difficulty: Either equities are seen as too risky to invest in or private investors blindly follow the buy recommendations of dubious sources. Therefore neutral information in the interests of consumer protection is crucial.
In which market segment is the share listed and which consequences does this have? Is it traded as first or secondary listing on the exchange? What home market does the equity have? Will I get enough information regarding this share? There are lots of issues private investors should deal with before investing in equities. However, in reality information gathering is neglected by most investors. It seems too complex, too difficult. This makes it easy for dubious “experts” and publishers of doubtful market letters to defraud private investors. Börse Berlin aims to stop this dangerous lack of information with its new and simple labelling of shares.
On the internet page www.boerse-berlin.com equities (XONTRO) are labelled with three different symbols:
- An info sign informs investors that the shares of this company are traded as secondary listing in Berlin. Applicable for the first listing of these shares are the rules and regulations of the home market in question.
- Shares with home market Börse Berlin or OTC BB/OTC QB are marked with a yellow caution symbol. Often these are smaller companies or shares with little trading activity. Therefore they are potentially more sensitive to fraudulent trading activities.
- Finally a red caution symbol draws the attention of investors to the fact that the price of these shares might be manipulated. A warning note (available as pdf for download) informs investors more detailed.
Of course the possibility of trading halts/suspensions in these equities remains untouched and will be carried out, if orderly trading cannot be ensured anymore.
The equities in question are labelled on the detail site of Börse Berlin´s internet page. Not labelled are shares that are traded in the Regulated Market and index constituents, for which lead brokers have liquidity obligations. For more information on liquidity obligations please see “Quality of trading/Equity Trading".
Thanks to the new labelling system investors are informed much easier and faster about possible risks of a particular equity, that extent the normal investment risks connected with shares in general.