Transparitrade (TPT) has launched a multi-dealer trading platform for the US structured products market. The new platform provides comprehensive educational tools that are a must-have for those that serve US retail investors, the platform boasts around 100 written tutorials covering general investment and, specifically, structured notes, exchange-traded notes and structured certificates of deposit, according to Alan Angell (pictured), chief operating officer at TPT, a spin-off from Wallstreetdocs.
"Our education is the best in the market and was completed with the assistance of Morrison Foerster," said Angell, adding that this material is being reviewed by the US Financial Industry Regulatory Authority (Finra), with a formal application to the broker-dealer regulator to be submitted before the end of this year, according to Angell.
TPT has been officially released into a platform market that already includes Goldman Sachs' Simon and Navian Capital, and stands out as the only one of the three that is owned and run by an independent technology company, although Halo Investing, a software based advisory service for entities that invest on behalf of investors in structured notes, is also self-directed. "We are in advanced talks with four issuers to show their calendar deals on the platform early or in the middle of the first quarter of 2018," said Angell. The next development is destined to be customised pricing, according to Angell.
The company completed an roadshow of US broker-dealers last year, gaining registrations from Advisors Asset Management, Ameriprise, Incapital, LPL and Raymond James, according to Angell. "As of next week, the distributors (and issuers) will have access (although not to the entire network) with the hope it can be approved downstream within their networks," said Angell. "We are going out now into the market to put the platform into the hands of the buyside, to build up the user base... "We will take feedback over the next six to eight weeks and continue the discussion with issuers."
Issuers will pay a fee on the basis of the volume traded that is above the amount traded in the previous year, a feature that has been introduced to ensure that the fees are not paid on cannibalising existing, non-platform business, according to Angell. "It is free to the buyside, to help the build, although we are trying to build on the issuer and distributor side," said Angell.
Additionally, there is a fixed platform access fee for issuers, irrespective of any increase in their business. "People have given us positive feedback on the model," said Angell. TPT's prime target will be to capitalise on an increase in sales of around 30% over the last year."
In 2018, structured investment issuance volumes in the US is on track to show around a 30% increase on 2017, according to Angell. 'Our vision for the platform is to increase the transparency of and accessibility to this investment product market, to capitalise on market growth and stimulate further growth by putting the tools investment advisors need directly on their desktops,' said Angell, in a release issued minutes ago.
The initial launch of the TPT platform will encompass education and training material, as well as market data on issuance volumes and market trends, according to Angell.
Europe will enter the picture from the middle of next year, allowing the company to make the most of relationships fostered with the 20-25 European and Swiss issuers it has worked with on the creation of the European Commission's packaged retail and insurance-based investment products (Priips) regulation and second markets in financial instruments directive regulatory compliance platforms ahead of the implementation of the two new laws on the first day of January 2018.
Wallstreetdocs has interfaces built out to more than 20 European and Swiss issuers through its Priips and Mifid 2 platforms and will look to capitalise on this market position to make TPT an integral part of the global structured products market in 2018, stated the release.
In the longer term, the company is exploring ways to integrate both robo advice and blockchain into its technology offering, according to Angell.
Will education be the catalyst for platform development in the US?