From decrement to ‘Value for Money’, panelists shared regulatory updates during the discussion at SRP France 2025 conference held in Paris last week.

Julien Laroche, director, bond market and financial sector division, issuers department at the Autorité des Marchés Financiers (France’s Financial Markets Authority or AMF), kicked off the discussion by highlighting the findings from the report the regulator co-published with The Prudential Control and Resolution Authority (ACPR) last month on the French structured products market between 2021 and 2023.

Our attention at this stage is to come above all to decipher the fee structure in collaboration with the industry - Julien Laroche, AMF

One area of focus for the regulator is the underlying assets. While most of the products in France are linked to fairly common underlyings including indexes and shares, indexes comprising a decrement mechanism represent around one third of the products, noted Laroche, pointing at the findings of the joint report.

“That surprised us intuitively,” Laroche said. “The feeling was that it would be much more but ultimately it is only a third.”

Left to right: Julien Laroche, AMF; Pauline Laurent, AFPDB; Jean-Philippe Cavrois, AFPDB; Thomas Wulf, Eusipa

Mapping with a focus on looking into the distribution element of structured products, deciphering the structure of fees from the industry’s feedback, and helping to explain the complexity of the decrement are three major subjects which will guide the regulatory actions in the coming months, Laroche noted.

“We got a lot of feedback on the fact that the performance was expressed in gross but that there was a topic about fees that wasn't necessarily very readable or very decipherable,” he said. “Our attention at this stage is to come above all to decipher the fee structure in collaboration with the industry.”  

Speaking of the decrement overlay applied to many products in France, Laroche noted that the area has always been a point of contention for the AMF, as it is a difficult feature to explain to the general public.

“We have worked a lot to improve the disclosure altogether. But it remains globally from the point of view of the AMF perfectible and therefore we will have to put the subject back to work,” he said.

Left to right: Julien Laroche, AMF; Pauline Laurent, AFPDB and Jean-Philippe Cavrois, AFPDB

Pauline Laurent (pictured), vice president at the French Structured Investment Products Association (AFPDB), echoed Laroche’s point on further exploration of decrement and addressing the fees embedded in products.

“We think there is a part of the [fees-related] subject that can be addressed by Value for Money... [It's] still an interesting tool to justify these fees and their level in relation to the performance offered by the product because that is still the issue,” Laurent said, adding that the association is set to release a report on value for money testing in July.

Further education also remains a focus to inform more broadly to the ecosystem, including stakeholders, supervisors and other decision-makers, on “how the fee structure of a structured product is constituted and debunk certain preconceived ideas, even certain prejudices,” she said.

A meeting on the simplification initiative by the European Commission (EC) held in May was also in the spotlight, as the Parliament and Council continued the discussions without a clear outcome, according to Thomas Wulf, secretary general at European Structured Investment Products Association (Eusipa).

“We see the discussions around the validity still being triggered at the legislative level of the member states, but also at the European level,” Wulf said.

Left to right: Jean-Philippe Cavrois, AFPDB and Thomas Wulf, Eusipa

Meanwhile, the European Securities and Markets Authority (Esma) has also released guidelines to limit the use of the supplement in the base prospectus locations in any case, addressing a mandate within the framework of the Listing Act by the EC, according to Laroche.

One of the areas where the Listing Act is working on is on incorporating ESG characteristics into structured products, he said.

“We have campaigned hard to include structured products – even when there is no green user procedure which had been on the subject, therefore the information will be requested in a few months in the prospectuses on these elements,” added Laroche.

“With structured products, we were going to find ourselves in a difficulty where you potentially claim green characteristics in your promotional documentation and that would not be found in the prospectus and there you have text,” he concluded.

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