Morgan Stanley and Flatex, a subsidiary of Fintech Group, are further strengthening their partnership with the US bank receiving preferred partner status for exchange-traded products (ETPs) on the online broker's open platform, with the US bank absorbing the fees and presenting a zero fee on trades. Fees typically range from €3.90 to €5.90 for over-the counter trades on the Flatex platform.
The move follows the launch of their ETP offering in June this year. Flatex ETPs issued by Morgan Stanley can be acquired and traded at no cost for over-the-counter (OTC) orders with a volume of €500 or higher. The new suite of ETPs available covers different asset classes and a range of underlyings, as well as themes.
"Competition is once again stimulating the business and can give investors a price advantage over a short period of time," said Lars Brandau (pictured), managing director of the German Certificates association (Deutscher Derivate Verband - DDV). "The fact that no cost is involved for OTC orders is nothing new as, according to Brandau, similar offers from different issuers have been seen in the Germany market before.
"However, it is important in such a cooperation that clear definitions, especially in the product name, are chosen," said Bandau. "Investors must be able to immediately and unequivocally know which issuer is behind the product." In the DDV's Fairness Code, members of the association are obliged to use clear terms for product names, according to Brandau.
Morgan Stanley's offering on the Flatex platform includes 13,992 structured products, including leveraged and factor certificates, as well as warrants on a wide range of single share underlyings. In addition, investors have the chance to select baskets creatred as indices by Solactive on themes including artificial intelligence, the US elections, mining, billionaires and TSI Deutschland 30. All products are also listed on the Stuttgart Stock Exchange.
Since the launch of the partnership, ETPs branded by Flatex and issued by Morgan Stanley have captured more than 10% of the Flatex platform's trading activity, said Frank Niehage, chief executive officer of Fintech Group. 'Flatex products can also be traded on external platforms, so as our partnership continues to strengthen, we expect interest in our ETP offering to grow significantly,' he stated.
'Our partnership with Flatex offers us a strong platform to provide products and services to investors in Germany and Austria,' said Dirk Grunert, head of retail structured products Germany, Austria and Switzerland at Morgan Stanley in a statement.
According to the SRP database there were 1,757 leverage long turbo certificates and 1,666 leverage short turbo certificates issued by Morgan Stanley and Flatex this year.
The Flatex platform provides investors with a range of products including certificates, warrants, funds, and deposits from various banks. There are 10 issuers offering structured products on the platform, mostly leverage certificates and warrants, including BNP Paribas, Citi, Commerzbank, Deutsche Bank, DZ Bank, Erste, Goldman Sachs, HSBC, UniCredit, ING Markets, Lang & Schwarz, Morgan Stanley, RBS, Societe Generale, UBS and Vontobel.
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