BinckBank has entered the turbo certificates market in the Netherlands after months of preparations. The Dutch online broker said that the launch responds to the demand for leverage products from active and experienced investors.
"Our clients make extensive use of turbos," said Koen Beentjes, chief executive of BinckBank. "At this moment more than 15% of our investment transactions are in a turbo."
The move comes at a time when both Royal Bank of Scotland (RBS) and ABN Amro have announced they are about to exit the market for leverage products and other structured products.
RBS's activities will be taken over by BNP Paribas soon while ABN Amro has cited increased regulations, changing customer needs and the high cost of technology as reasons to review its activities.
"[W]e see a development in the market that large financial institutions pull turbos out of the market due to increased costs of technology," Beentjes said. "To ensure the quality and continuity of this popular product, we therefore want to offer our own turbos."
Trading
BinckBank has appointed UBS as market maker while - unlike ABN Amro, Citi, Commerzbank, ING and RBS, who list their leverage products in the Euronext Amsterdam exchange - trading will take place via the Citigroup Automated Trading System (Cats) which is in the process of being relaunched after Citi and Börse Stuttgart signed a binding agreement to launch a new company that will own the the platform for bilateral trades, which includes OTC transactions in structured products.
BinckBank turbos are exclusively available for clients of BinckBank in the Netherlands and provide investors with leverage exposure to underlying assets such as the local AEX-index, the DAX-index, many Dutch and international stocks, and precious metals.
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