The German Federal Financial Supervisory Authority (BaFin) has received numerous complaints from investors amid the latest market volatility. The regulator has confirmed that many of these complaints relate to trading disruptions at brokers.

Various online brokers that are subject to BaFin supervision have been affected. The supervisory authority immediately urged the companies to comply with the supervisory requirements and to provide their customers with all services in accordance with supervisory law and without disruption.

BaFin notes the exceptionally active trading on platforms of German brokers in shares in GameStop, AMC Entertainment, BlackBerry, and Nokia. This has caused an overload of trading systems and, ultimately, it was not possible to ensure smooth trading.

BaFin reacted immediately to the complaints about trade restrictions and asked the companies it supervises to comment on the allegations at short notice. When the regulator gets the responses, it will assess whether the companies concerned have violated the rules of supervisory law. These include the German Banking Act (KWG), the Market Abuse Regulation (MAR) and the Securities Trading Act (WpHG).

In addition, BaFin expects companies to be able to offer their services in a stable manner even when the markets are extremely volatile. Companies have to have the necessary infrastructure ready for this.

BaFin is also investigating indications of market manipulation. Many complaints alleged that there had been market manipulation. BaFin is also following up on this information. If the allegations are confirmed, the supervisor will file a criminal complaint with the responsible public prosecutor’s office.

Customers who are of the opinion that they have suffered financial damage or lost profits as a result of the behavior of a company supervised by BaFin must assert their claims against the company under civil law.

Other regulators have also issued statements regarding the recent trading frenzy. The UK Financial Conduct Authority (FCA), however, was quite elusive in its position. The FCA said:

“Broking firms are not obliged to offer trading facilities to clients. They may withdraw their services, in line with customer terms and conditions if, for instance, they consider it necessary or prudent to do so. Firms are exposed to greater risk and therefore more likely to need to take such action during periods of abnormally high transaction volumes and price volatility”.