HSBC Trinkaus & Burkhardt has become the second issuer in Germany to join Vontobel's Mein-zertifikate.de platform for structured products. The platform allows advisers of banks and savings institutions and asset managers as well as private investors to create, order and invest in structured products in real time.
With the necessary infrastructure already in place - the platform was already proven in Switzerland - and with a sponsor also committed to the German certificate market, it was a natural step for HSBC to join Mein-zertifikate.de so soon after its launch, according to Matthias Hüppe (pictured), director, head of derivatives public distribution, global banking and markets, HSBC. "We believe that multi-issuer-tailoring platforms will become market standard in the years to come, it is the aim of HSBC to play a leading role in this development in the German market," said Hüppe.
The platform's product range, which until now was limited to reverse convertibles, discount and capped bonus certificates, will be expanded and other investment products will be on offer now HSBC has joined.
While the German certificate market provides investors with a great deal of choice, it is becoming increasingly difficult for end investors to filter and select certificates they wish to invest in, according to Hüppe. "As more and more tailoring platforms go live the selection process will be truly client driven rather than the manufacturer trying to anticipate the investors' needs," he said. "For HSBC, there is a clear interest in issuing products which the end investor has requested and initiated as the probability of trading is much higher than simply listing tens of thousands of products to the market hoping to match clients' demand and transactions taking place," said Hüppe.
With the platform, Vontobel aims to turn the German market from one where the emphasis is on offer rather than a market driven by demand, and, although it will take time, the German certificates market will move in that direction as there are "clear benefits" for all parties, according to Hüppe.
"It is quicker for the end investor to request his own tailored product rather than to search for an existing product in the secondary market," he said. "The pricing competition between the issuers on the platforms also provides transparency and ensures that end investors get a fair price. For issuers having a greater number of product actually traded is obviously preferable and more efficient than what has been seen in the past.
"With regard to acceptance, the biggest challenge we have seen so far relating a tailoring platform is to explain to the participants that there is no obligation to trade after a request to price or issue an instrument," said Hüppe. "Our experience shows that once clients have recognised this and started to actively use the platforms confidence, familiarity and acceptance grow quickly and transactions follow."
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