The US investment bank seeks to engage with Swiss structured products association to continue bringing transparency to the market
JP Morgan has joined the Swiss Structured Products Association (SSPA) in a move to increase its visibility in the Swiss structured products retail market. The US investment bank becomes the 18th issuer and the 39th member of the trade body.
‘The decision to join the Swiss Structured Product Association underscores our commitment to the structured products business,’ said Nick Mihic, head of Switzerland markets and co-head equity derivatives Germany/Austria at JP Morgan. ‘We look forward to an active exchange with the Association on product trends and innovation, market governance and investor protection.’
The US investment bank has established its presence in the Swiss market over the last three years following an agreement with Vontobel to provide pricing within the Swiss bank’s Deritrade structured products multi-issuer platform (MIP). A year later, in April 2016, JP Morgan became a platform partner of Leonteq.
The US bank entered the Swiss retail market as an issuer in 2012 when it joined the Derivative.com platform (which was acquired by Vontobel in 2014) alongside Commerzbank, and Canada’s RBC.
JP Morgan remains a marginal player in Switzerland’s structured products retail market. In 2018, the US bank issued eight products worth €14.3m and has now 53 live products linked to a variety of underlyings worth an estimated US$72m. The most common payoff type used by JP Morgan in Switzerland is the knockout (26 products), followed by the reverse convertible (25 products), credit-linked notes (11 products), worst of (10 products) and range accrual (eight).
The SSPA represents the interests of the main market participants which together cover over 95% of the structured products market volume in Switzerland. This is the third addition to the SSPA since the beginning of 2019 following Calebo Capital and BX Swiss joining the association last week.
The new additions come on the back of new modifications to the SSPA categorisation introduced by the SSPA executive board in relation to the Swiss Derivative Map (SDM).
Among other things, the SSPA has revised the categories to harmonise them with the Six Exchange’s Connexor IBT Type Code Model. This is aimed at ensuring that similarly equipped investment products with different Connexor IBT Type Codes are mapped into the same SSPA product type category.
In addition, the trade body has introduced a new product type category - capital protection certificate with twin-win (1135) which ‘completes the categorization model by the missing structure with the global behaviour of capital protection and the local characteristics of the twin-win payoff profile; and the express certicate without barrier (1255). The SSPA has also renamed express certificates (1260) which are now categorised as barrier express certificate (1260), and completes the categorisation model for reverse convertibles with autocallability without a fixed coupon.
The association is also removing 99 categories to enable investors to distinguish between structured products and traditional products.