Commerzbank has launched Wunschzertifikat, a new online platform to offer bespoke structured certificates to retail investors in Germany. This is the third such platform launching in the German market following the introduction of Vontobel's mein-zertifikat.de and HypoVereinsbank UniCredit's my.one direct (limited to Flatex clients) in 2016.

The Wunschzertifikat platform is integrated on the bank's Primegate platform and is supported by Boerse Stuttgart and financial portal Onvista, and is aimed at expanding the target market for structured certificates.

Philipp Kalb (pictured), head of product management Primegate at Commerzbank who has spearheaded the launch of the new platform said the bank had been working on this initiative for about a year. "The idea behind this development is our desire to put the tools in the hands of the end clients for them to customise their structured products. Issuer platforms have been in the market for some time now but they mainly focus on professional investors, advisors and institutional clients," said Kalb. "We wanted to bridge the gap that issuer and multi-issuer platforms were creating.

To achieve that the German bank opened up Primegate and made it completely public and accessible to anyone on a public platform. "This is how the partnership with Boerse Stuttgart and financial portal OnVista came about," said Kalb. "Commerzbank wanted to go further and beyond offering a list of structured certificates for investors to choose from which is why we added the possibility of customising and creating new structures with 'a click of a button' based on the need of a particular investor."

Boerse Stuttgart has welcomed the move as it is keen on 'strengthening exchange trading' in structured products and introducing 'innovative new services', according to Rupertus Rothenhäuser, managing director sales at the exchange. "The Wunschzertifikat service and the subsequent listing on the Stuttgart stock exchange for the customised products configured using the service, is one step in this direction," said Rothenhäuser, adding that the exchange has a strong record of supporting investors in this category. "The service offers additional benefits for active, independent-minded retail investors."

According to Rothenhäuser, given the status of Boerse Stuttgart as a public venue, the exchange "always places great importance on strict impartiality", a principle that extends to the Wunschzertifikat platform, which is expected to shift issuance in Germany from an offer-oriented approach to a demand-solution oriented set up where investors are provided with the tools to assess their preferences/actions, as well as derive trends and investment ideas for themselves.

The platform is also aimed at simplifying the investment process in a market with an ever increasing number of certificates available which makes searching for the right product difficult for investors, said Rothenhäuser. "As a multi-issuer platform, it is open equally and under the same conditions to all issuers that wish to be involved," he said. "In turn, this allows transparent competition on prices in the interests of investors. The transparent competition between the issuers is benefiting the investors [and] provides a neutral open platform for customized products."

The high number of products issued in Germany that are unused/untraded has resulted in a significant number of certificates not being traded at all "which is a burden to the technical systems of the stock exchanges, issuers and data providers", according to Rothenhäuser.

The new platform will allow investors to design their own products in a few steps and get the product priced in real time on request by Commerzbank and Societe Generale, the only other issuer that has on-boarded on the platform. Once the product is issued investors get an issue code via SMS.

Peter Bösenberg, head of cross asset distribution Germany & Austria at Societe Generale, said multi-issuer platforms increase investor choice as they can compare and decide between different prices from different issuers. "For the client it is definitely a benefit and it is [also] very transparent," said Bösenberg. "The client - retail as well as institutional - has the chance to price his own idea of a product with own parameters and within some minutes the products are tradeable. This innovation could change the German certificates market away from mass issuing to the point of issuing of own ideas with own parameters."

The move towards a multi-issuer set up in Europe has taken some time to materialise, but many issuers are now seeking to increase the efficiency of their issuance. The introduction of multi-issuer platforms in Germany could also free up stock exchange capacity and improve the ratio between issued and traded products.

As for the offering available, at the moment, investors have to securitise their derivative exposure and there are some limits to the assets and structures available, according to Kalb. Currently, investors can issue and price five product types (warrants, discount certificates, bonus certificates, capped bonus certificates; and reverse convertibles for private investors) in the platform.

"Primegate nevertheless offers 27 product types and invites any issuer to start quoting on the platform for these, but as it is a marketplace, it is fully up to each issuer to choose his own scope," said Kalb. "For our Wunschzertifikat-Platform, investors can currently access a suite of around 500 underlying's and we expect the catalogue of products and underlying's to increase over time. The platform's offering will increase and respond to demand."

Kalb expects new currencies and leveraged products aimed at intra-day and more speculative investors as well as new structures such as reverse convertibles made available to retail investors in 2017.

"The goal is to attract other issuers and we expect the outcome to be a rational market and issuance levels to be in line with what investors are demanding," said Kalb. "This will allow issuers to also offer some alternative exotic structures to the more sophisticated investors so that investor choice is not limited in any way."

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