UBS has opened its structured products platform to other investment banks in a move to improve its position in the market.
The Swiss bank has launched a pilot phase to offer investment banks access to its new issuance platform called EQ/FX Investor which is connected to 150 client advisers in Switzerland. In this first stage, Vontobel and Barclays have been plugged in to the platform and will be able to provide pricing to financial advisers requesting quotes on structured investments.
A UBS spokesperson confirmed that the new UBS EQ/FX Investor platform is in a pilot stage and that the bank expects to bring onboard other providers soon.
“The sales of structured products by UBS Wealth Management (UBS WM) has been based on an open product architecture for years,” he told SRP. “UBS WM aims to handle the sales of third-party products efficiently.”
The Swiss market has moved recently towards a multi-issuer set-up, with Vontobel becoming the first issuer to establish itself as a pioneer in the multi-issuer click and trade platform business to capitalise on the trend in wealth management towards independent and product-neutral investment advice.
The Swiss Structured Products Association believes that multi-issuer platforms are the next logical step following the success of fully automated single-issuer meta-tools in the Swiss market, Daniel Sandmeier, head of structured products sales at Credit Suisse and former president of the trade body, told SRP in a recent interview. He said that these platforms increase the transparency and comparability of products and allow more competitive pricing.
“In addition, platforms allow issuers to increase their efficiency and lower their cost,” he said. “Hence, multi-issuer platforms create a win-win situation for all parties involved.”
Open architecture
The UBS move is in line with the bank’s open architecture set-up and is also the firm’s response to the new regulatory and market environment in the structured products marketplace to improve price transparency, diversify issuer risk and lower costs.
Market sources were expectant to see how the pilot phase evolves as if successful the bank will be opening up its client adviser network to other structured products issuers.
According to data from the Swiss Structured Products Association (SSPA), UBS remains the market leader with a share of 33%, followed by Vontobel with around 20% and the Zurich Cantonal Bank with 17%. The top five providers table is completed by Julius Baer which trails at a significant distance with 7% and Credit Suisse with just under 4%.
A Vontobel spokesperson confirmed the bank’s participation on UBS’s platform and told SRP that this fits the bank’s deritrade strategy, but declined to comment further. Barclays also confirmed it is participating on UBS’s click and trade platform.
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