Latest: DDV releases ESG structured product code of conduct

The new guidelines, agreed by the 15 issuers of structured products represented in the association, distinguishes between ESG Products and ESG Impact Products.

In the case of ESG Products, the issuer defines one or more dedicated sustainability strategies in advance for the selection of the underlying; whereas ESG Impact Products are impact-focused bonds that ‘pursue one or more measurable sustainability objectives’ such as funding economic activities that contribute to the defined sustainability objectives.

Only ESG Products and ESG Impact Products are labelled as sustainable and carry a common logo - Henning Bergmann, DDV

For both ESG Products and ESG Impact Products, issuers will need to state which sustainability standard they follow (eg the UN Principles for Responsible Banking, the UN Global Compact, or other equivalent principles).

This also applies to basic products - issuers take the principles of the UN Global Compact into account as well, but the products are not classified as sustainable.

‘Only ESG Products and ESG Impact Products are labelled as sustainable and carry a common logo,’ said Dr Henning Bergmann (pictured), CEO and member of the board of directors of the DDV. ‘Our goal is to ensure that a variety of sustainable structured products are available to them [and to] provide transparency and reliability for sustainable investment in structured products, and thus create trust in the market.’

The DDV Sustainable Finance Code of Conduct is also seeking to fill a regulatory gap and front run new industry standards as structured products are not currently covered by the EU Sustainable Finance Disclosure Regulation.

‘We assume that the industry will implement these requirements in an equivalent manner,’ said Bergman.

Click in the link to download the DDV Sustainable Finance Code of Conduct.

Leonteq, Glarner team up in private pension push

Leonteq and Glarner Kantonalbank (GLKB) have reached a cooperation agreement for the marketing, distribution and administration of private pension savings solutions.

Under the terms of the agreement, GLKB will offer private pension investors in Switzerland savings and investment solutions provided by the Swiss structured products specialist firm which will act as the service and technology partner. GLKB will contribute its ‘expertise in the areas of banking and digitalization’.

‘Offering digital banking products – and thus meeting current and future client needs – is an integral part of GLKB’s strategy,’ said Sven Wiederkehr, CEO of GLKB.

The products will be administered on Leonteq’s technology platform and digitally marketed via a new third-party company. Leonteq and GLKB will each hold 50% of the shares in that company once it is established.

Leonteq has worked with GLKB to develop a purely digital, structured savings product to offer private pension investors the combination of a guarantee and market exposure, as opposed to ongoing interest payments. This first joint product is expected to be launched by the end of 2021.

As part of the agreement, Leonteq’s Insurance & Wealth Planning Solutions (IWPS) business unit has created Sigma, a new digital platform for its partnership with banks in the area of savings solutions based on the existing platform for insurance companies.

The Sigma platform has been designed to offer and administer ‘savings products of this kind on an automated and scalable basis’. In addition, Leonteq will operate a mobile app and a related website as well as digital onboarding.

Both firms agree that in the area of voluntary retirement savings, ‘there is a genuine need among many bank clients for products with a guarantee component and upside potential’.

SPCG targets financial advisors

Structured Products Consulting Group (SPCG) has announced a new collaboration agreement as it builds a suite of risk management and income solutions targeted at financial advisors ‘interested in growing their practice in the ever-evolving structured investment and derivatives space’. 

The firm has forged alliances with a number of players in the US including Halo Investing, Van Hulzen Asset Management, Harvest Volatility Management, Fort Point Capital Partners and Bluestone Capital Management. 

‘The time is right to emphasise the benefits of utilizing derivatives and structured products as a critical risk management and yield enhancement tool for financial advisors.’ said Eric Miller, founding principal of SPCG.  ‘We formed SPCG to bridge any knowledge gap advisors may have and to provide an objective, independent view of a wide breadth of best-in-class strategies at no additional cost to the advisor or their end clients.’

SPCG was founded by Miller, former managing director, structured product sales, global banking & markets, at HSBC Bank USA, in September 2020. The firm added Andy Robertson as principal, business development and head of sales in January 2021. Robertson joined from Wells Fargo where he was director, sales and marketing - investment solutions, for the last two years.

SPCG provides derivatives advice to advisors on strategies and platforms that span three distinct solution sets: derivative investments, structured products and concentrated equity solutions.

ACDX offers world's first bull bear strike option for Chia tokens

Crypto derivatives exchange ACDX has launched a leveraged Bull Bear Strike BBS trading option for Chia Tokens (XCH) as part of its offering of advanced structured products for sophisticated traders.

The firm is the world's first crypto exchange to kick off such a leveraged listing, targeting sophisticated traders seeking to bet on XCH bull bear strike tokens (XCH BBS) with multiple times leverage.

Founded by Bram Cohen, the inventor of the BitTorrent network, Chia Network is building a better blockchain and smart transaction platform which is more decentralised, more efficient, and more secure, according to Andy Cheung, founder and executive chairman of ACDX. ‘It is the first enterprise-grade digital money, using the first new Nakamoto consensus algorithm since bitcoin. Its goal is to improve the global financial and payments system.’

The BBS token combines perpetual futures and options and can be traded as perpetual futures with the capped risk like options.

Given the mass adoption of blockchain this year, ACDX is ‘closely monitoring the decentralized financial space’. The exchange believes that the new BBS listing can help traders ‘deliver the vision to bridge the gap between the decentralized and centralized blockchain economy’.

S&P DJI rolls out cryptocurrency series

S&P Dow Jones Indices (S&P DJI) has launched its new series of digital asset benchmarks, the S&P Digital Market Indices. These new S&P-branded indices will measure the performance of digital assets listed on recognized open cryptocurrency exchanges.

At launch, the index series includes the S&P Bitcoin Index – which measures the performance of Bitcoin; S&P Ethereum Index – which measures the performance of Ethereum; and S&P Cryptocurrency MegaCap Index – which tracks the performance of Bitcoin and Ethereum digital assets.

According to the index provider, the S&P Digital Market Indices series will include additional coins and broader-based indices such as large cap and broad market benchmarks later this year.

The indices use pricing data from Lukka, a crypto software and data provider, to determine the eligibility universe and pricing of individual constituents.

The Digital Market Indices will make it easier for investors to access and assess this emerging technology-driven asset class while potentially mitigating some of the common risks associated with this traditionally speculative market, said Peter Roffman, global head of innovation and strategy at S&P DJI.

‘Traditional financial markets and digital assets are no longer mutually exclusive markets,’ he said.

In addition to the new S&P Digital Market Indices, S&P DJI also launched customized cryptocurrency indexing solutions at the end of last year which were deployed by IDX Insights to launch a series of risk-managed custom cryptocurrency indices.