BNP Paribas Investment Partners (BNPP IP) has started to offer its pension solutions for businesses on i-PensionSolutions, an open Institution of Occupational Retirement Provision (IORP) platform designed and established by Credit Suisse and Swiss Re, which was licensed by the Dutch Central Bank (DNB) in July this year.
“We are seeing increasing demand in the market for innovative individual pension products, fuelled not only by the high costs associated with existing plans but also by changes in the regulatory environment,” said a BNP Paribas spokesperson. “Our long-standing experience of individual pension solutions is reflected in our offering of defined contribution products that strikes a healthy balance between return, certainty and flexibility thanks to a choice of building blocks.”
BNPP IP will offer pension products including customised or exchange-traded structured products to meet client needs in capital protection, yield and diversification, based on the life cycle principle, meaning that risks are gradually reduced as the retirement date approaches.
“What is new is the option to scale back risk depending on market conditions, such as the interest rate environment,” he said. “Each individual is given the opportunity to select the building blocks that best suit their own time horizon and personal objectives.”
Clients will have access to a broad range of options to choose from, including structured solutions thanks to partnerships with various other players and the open architecture approach of the i-PensionSolutions IORP which offers businesses a full-scope solution for designing their own flexible and transparent pension plan based on the pick-and-mix principle.
AIFMD
BNPP IP has also been granted authorisation to operate as an AIF Manager under the European Union’s Alternative Investment Fund Managers Directive (AIFMD) in France, the Netherlands, Luxembourg and Belgium.
BNPP IP is among the first asset managers to be allowed to offer both Undertakings for Collective Investment in Transferable Securities (Ucits) as AIFMD investment funds in the four countries. These licences will allow BNPP IP to offer a wide range of alternative funds to both retail and institutional clients, in addition to the funds that it can offer retail investors under the Ucits framework of EU rules.
“This will allow us to offer both local and global solutions to our global client base and make sure that these are fully adapted to the growing requirements of European investors in terms of transparency, security and risk control,” said Charlotte Dennery, chief operating officer at BNPP IP. “Being able to offer Ucits as well as AIF funds to all European investors has been a cornerstone of our international expansion plans.”
BNPP IP currently manages about 900 alternative investment funds. With these licences, around 50 funds can be passported for distribution in a wider number of European countries, allowing institutional clients easy access to the products.
Structured issues
The European Securities and Markets Authority’s (Esma) AIFMD made the headlines in the structured products market last year when the Joint Associations Committee (JAC) on retail structured products said that structured issues should not be within the scope of the AIFMD as they fall outside the definition of alternative investment funds.
The industry body stressed that structured issues fall outside the scope of the AIFMD because they are capital markets issuances and not funds; have a defined payment profile, not an investment policy; they’re used for raising capital for a bank or other financial counterparty, ie. financial intermediation; assets are acquired for hedging the payment profile, not as pooled investment; and they are already regulated.
In November 2013, the Central Bank of Ireland (CBI) confirmed after a consultation that financial vehicle corporations and entities that issue debt securities will not be required to seek authorisation or appoint an alternative investment fund manager (AIFM), acknowledging that structured issues do not fall under the framework of the AIFMD unless the European regulator changes the current rules.
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