When structured instruments including warrants and certificates are analyzed in global markets, it is seen that the products traded in these markets are divided into two categories: long-term investment products and leveraged products. Investment products suitable for relatively long-term investment are generally grouped under certificates. Certificates are structured financial products in the form of securities that give the investor the right or obligation to receive a receivable upon the occurrence of predetermined conditions. Compared to warrants, they generally have longer maturities and do not provide leverage to the investor. Depending on the return profile, their structure may include equities, currency pairs, bonds, bills, debentures and derivatives. Certificates are called by various names depending on the return profile they offer, such as discounted certificates, index certificates, reverse convertible certificates, delta-1 certificates, and principal-protected certificates.
Certificates are regulated by the Capital Markets Board in the same communiqué with warrants. Although certificates are traded on Borsa Istanbul with almost the same trading rules as warrants, some trading rules may differ according to certificate types. Investors should pay particular attention to these issues when trading certificates. Certificates, like warrants, are financial instruments that place the issuer under financial obligation to the investor.
