New consortium-backed structured products platform goes live

Contineo started live operations today for a multi-issuer structured products platform and messaging network. Subscribers to the new messaging venue comprise AG Delta and Barclays, BNP Paribas, Goldman Sachs, HSBC, JP Morgan and Societe Generale, as well as their private banking units (except Societe Generale's which sold its private banking unit to DBS in 2014), along with Julius Baer.

“Replacing email with a multi-issuer electronic platform will allow us to access products, have an overview of the market and retrieve data in a streamlined fashion that we just don’t have today,” said Roger Meier, head of structured product sales Asia at Julius Baer. “In the future, we envisage the evolution of things like common term sheets, post-trade data and more payoffs.”

The addition of Julius Baer to the platform is in line with Contineo’s plans, which include around eight to ten issuing banks and the same number of private banks by the end of this year, according to Mark Muñoz (pictured), managing director at Contineo.

Two European issuers and their private banks are in talks to be included within the next two weeks, according to Muñoz. “Contineo has other private banks lined up to go live on the platform, but the focus today is on being in production with six payoffs, having industry-best security, scale and stability, as well as a large number of issuers connected,” he said.

Providers can use the platform for equity-linked and knockout equity-linked notes, accumulators, decumulators, fixed-coupon notes and OTC options. “We remain open to collaboration with other software providers and software vendors, because we see there are opportunities to complement the different services around the technology offering, which is not necessarily just the multi-issuer component,” said Muñoz. “There are other areas, such as post-trade services, where the value proposition would be much more apparent once connected.”

Fragmentation is driven by a small handful of banks that want to have closed dealer pricing systems, said Muñoz. “This creates a disadvantage to small and medium-size players, but we can resolve that imbalance,” he said.

“We have increased our headcount in response to our subscribers needs and one focus will be in how we communicate,” said Muñoz. “We believe that the technical side is key for the development of the platform, but we will invest in our capabilities to share data and information around products, including performance throughout the life cycle of the products.”

Contineo competes with Vontobel’s deritrade, which was launched in March last year; the multi-issuer investment products distribution system (IPDS) launched by Leonteq, DBS, Avaloq and Numerix launched in Q1 2015; and the FinIQ EQ Connect platform launched by the specialist software provider in association with Thomson Reuters in December 2014.