SRP in brief: complexity in focus

The UK Financial Conduct Authority said it is planning to amend its Consumer Duty rules, and an area of ongoing work for the regulator over the coming months will be complex exchange-traded products (ETPs).

The regulator conducted a review of trading apps last November and is currently assessing whether firms are meeting Consumer Duty expectations for retail customers investing in complex ETPs. During the review, the UK regulator found that some product providers had not specified their target market at a sufficiently granular level, noting that in some instances, lower-risk and less complex products were offered alongside more complex or high-risk ones.

Financial institutions worldwide are facing an operational crisis rooted in poor data management for complex investment products, with deficiencies threatening profitability, compliance and client trust, according to a new report by S&P Global’s Crisil.

While structured products are valued for their bespoke payoffs, their complexity poses significant challenges for accurate, timely data handling, according to the study.

The market has seen renewed interest in equity factor-based strategies, and investors are increasingly interested in products that provide downside protection and risk management following April’s ‘Liberation Day’-triggered market correction, Spyros Mesomeris, UBS’ global head of structuring, told SRP in an interview. 

Deep diving into European markets via SRP data, Italy’s public offering structured products market saw estimated sales rise 36% to €12 billion (US$13.9 billion) in the second quarter of the year compared to the prior year’s period.

In Switzerland, an estimated CHF10.1 billion (US$12.6 billion) in sales was collected from 33,594 products that struck in Switzerland in August, up 64% year-on-year but down 30% on a monthly basis. During the period, the database registered 20 actively managed certificates (AMCs), which display some thematic and diversification trends.

Those AMCs ranged from equity conviction baskets such as the LUKB Asserta US Selection and Asserta Crispr/Cas9 Basket, capturing US growth and biotech innovation, to niche sustainable themes like the Kepler Nuclear Thematic Conviction Basket, positioned on the energy transition narrative.

Luma Financial Technologies is in active discussions with its institutional and private bank clients serving Latin American investors to also adopt AMCs, a segment where the Cincinnati-based tech platform expects to see US$5 billion in annualised issuance over the next five years.

Among people moves, Barclays appointed Anika Goel as managing director to lead quantitative investment solutions (QIS) structuring in Americas, based in New York. She joined the UK bank from Morgan Stanley, where she spent 17 years, most recently serving as head of equity structuring, Americas.

S&P Dow Jones Indices, Morningstar Indexes and Cboe Global Markets have reshuffled their teams following some high-profile departures.

In Asia, Savio Joseph, UBS’ former head of Asia Pacific flow derivatives and solutions sales, headed to Citadel Securities to take up a newly-created role as head of Asia Pacific institutional equity and equity derivatives sales, based in Hong Kong SAR.

In Korea, sales of structured products rose to KRW6.88 trillion (US$4.84 billion) in September, up over 57% from a year ago and 8.7% from the previous month, according to SRP data. Equity-linked securities (ELS), also known as capital-at-risk autocallable notes, saw sales jump 29% to KRW2.2 trillion on both a year-on-year and month-on-month basis.

In the country’s exchange-traded products market, the industry raised hopes for digital asset ETFs and discussed the challenges to overcome during a panel at the Korea Capital Markets Conference 2025 held in Seoul. Covered call strategies and various option-based products were also in focus.

Australian advisors have shown strong adoption of smart beta exchange-traded funds (ETFs), especially over the last year, according to an annual survey by VanEck. More than half of advisers (50.13%) had replaced market cap or passive exposures in their client portfolios with smart beta, marking an increase of 10.77% since 2022, the survey showed.

Last but not least, FVC’s Tim Mortimer explored Darwin autocalls – the hybrid autocall structure introduced to the market in the late 2010s – as the market seeks new solutions for investors.

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