Spain’s Comisión Nacional del Mercado de Valores (CNMV)has published a new classification systems for retail investors to help them deal with different levels of risk.
The system establishes two types of distinction. The first sets five colours for risk level and the second sets five classes for liquidity and complexity level of the instrument.
The CNMV said the new system seeks to strengthen retail investors protection and to create a universal system for the classification of financial instruments in Spain.
The regulator said it mainly looked at capital loss at maturity; issuer solvency; maturity dates and product characteristics.