A number of structured products providers in The Netherlands are considering a change of name for their leverage certificates that would mean adopting the universal ‘turbo’ tag.
The news comes after BNP Paribas announced in December 2014 that it would no longer protect the turbo name as a trademark in the Benelux region after a Dutch court ruled in favour of online broker BinckBank for its use of the term turbo for its leverage certificates range.
The French had claimed exclusivity over the use of what it said was a trademark and started legal proceedings against the Dutch broker: the judge ruled that the use of the name turbo by Binck was permitted since it is considered a generic name for this investment product and is no longer used as a brand name.
Commerzbank was first to make the move, announcing at the end of December that it would rename its speeder certificates in Belgium and The Netherlands with immediate effect. “Investors think the use of different names for the same products is not clear,” said Christophe Cox, head of listed products in Belgium and The Netherlands at Commerz. “Uniform naming helps to avoid confusion and ensures that competition can be conducted on the basis of product offerings, cost and service. That’s why from now on we will use the name turbo.”
Belgium and The Netherlands were the only two countries were the German bank used the name speeder for its leverage products; in all other markets, it used turbo.
The Dutch market for leverage products is serviced by six providers including ABN Amro, Binck, BNPP, Citi, Commerz and ING. ABN, BNPP and Binck already use the name turbo, while Citi and ING use speeder and sprinter, respectively, for their leverage products.
Citi is considering the change of its marketing name from speeders to turbos, according to Robin Said, warrants, sales and distribution equities at Citi in Paris. “A prerequisite of this rebranding is the coordination with other issuers in the Dutch market,” said Said.
Consultation with other providers is needed to harmonise the marketing names of the different product payoffs, such as turbos with a fixed maturity date, open-ended turbos, and open-ended stop loss turbos, said Said. “Citi wishes to proceed with such a change in accordance with the terms of our legal documentation to avoid any confusion for the public,” he said.
ING said it would give an answer after it had spoken to fellow members of the Dutch Structured Investment Products Association (Nedsipa). “We are going to talk about this during our next Nedsipa meeting,” said Arjen de Blecourt, head of ING’s sprinters team. De Blecourt said that renaming leverage products would fit within the association’s strategy of educating investors about structured products and promoting transparency.
According to SRP data 21,864 leverage products were added to the Dutch database in 2014. Commerzbank was the most active provider. The bank launched 7,106 speeders during the course of the year. The local AEX index, seen in 5,280 products, was the most popular underlying across all six providers.
Related stories:
BNP Paribas: turbo no longer protected as trademark in Benelux
Court backs Binckbank on ‘turbo’ tag dispute with BNP Paribas
Van Oudheusden: Turbos simply respond to a customer need