Glossary
Capital Protection Certificate
A Capital Protection Certificate is a structured product that repays a defined minimum amount of the invested capital at maturity, regardless of the underlying asset's performance. The capital protection applies exclusively against the issuer; in the event of the issuer's insolvency, this protection also ceases to apply.
At a glance
- Capital protection applies only against the issuer, not against market risks in the event of early sale.
- The protected amount is frequently between 90 and 100 per cent of the nominal value.
- Issuer Risk remains in full; capital protection lapses in the event of the issuer's insolvency.
Frequently asked questions
Capital Protection Certificates reduce market risk at maturity, but do not protect against Issuer Risk. If the issuer fails, the entire capital may be lost. In addition, if sold early on the Secondary Market, the actual market value may be below the protected amount.
Part of the topic
AMC & Structuring
