HSBC China has launched four structured deposits linked to the bank’s widely publicised AI Powered US Equity 5 Index (AiPEX5) after being rolled out in Singapore and Malaysia.
The launch marks the first index-linked structured deposits featuring artificial intelligence within a custom index offered by a foreign bank in China.
The up-and-out products were issued on 11 November and are open for subscription until 23 November. They are categorised by a minimum investment of CNY1m (US$0.15m) for the bank’s Jade clients and CNY500,000 for the premium clients. They all have a trigger-out level of 112% with a tenor of two years.
At the Jade level, the product with full principal protection have a trigger-out coupon of 12% and a participation rate of 150%, while the rates are 14% and 200% for the product with 98% principal protection. At the premium level, the product with full principal protection have a trigger-out coupon of 10% and a participation rate of 130%, while the rates are 12% and 180% for the product with 98% principal protection.
“The take up of these new solutions is increasing among retail investors, especially millennials, seeking portfolio diversification,” said Richard Li (pictured), head of wealth and personal banking at HSBC China.
Pictet builds own click & trade hub
Swiss private bank Pictet has launched a multi-issuer platform for structured products together with multiple renowned issuers on multiple different product types.
The new platform has been developed over the last 12 months by the firm’s global head of electronic derivatives business Philip Khalb, formerly head product management customised trading platform and the driving force behind Commerzbank’s multi-issuer platform Primegate launched in 2017.
Khalb left the German bank at the end of 2017 and launched his own fintech firm to build a new multi-issuer platform with a team of developers targeted at the private banking world in Switzerland. He joined the private bank in 2018 and integrated the platform into Pictet’s systems to provide access to pricing and trading for structured products via STP automation.
Pictet, an active structured products distributor, is seeking to streamline processes with external wealth managers. The platform is now live with six major issuers connected and covers a diverse set of products types, including currency notes, dual currency notes, rev conv, barrier rev conv as well as autocallables, and variations of some of these structures such as Phoenix structures with conditional memory coupons.
The platform which went live in early August, is fully integrated on Pictet’s post-trade landscape so once a trade is executed the booking and settlement is also done automatically, and is available globally to all Pictet branches in Asia and the US.
Privatam upgrades digital platform, onboards Seba Bank
Monaco-based wealthtech provider Privatam has upgraded its Parity structured products platform, which now allows wealth managers to build their own products and source quotes from 11 investment banks, ‘typically in less than two minutes’.
‘As Covid-19 accelerated global tech adoption, Privatam has reacted fast to offer wealth managers an upgraded version of Parity that meets their evolving needs,’ said co-founder Stan Perromat.
The new updated version labelled Parity 5.0 enables wealth managers to access investment ideas, compare returns, buy products, and track performance.
According to Perromat, the latest version of Parity provides investment stories, jointly created by Privatam’s expert researchers and pioneering algorithms, highlight trending topics, supported by around 20 related stocks and a hundred investment offers, ‘so wealth managers can choose the right products for their unique needs’.
Some of the new functionalities include a coupon barometer that notifies wealth managers when their target sectors and stocks are warming up; a consolidated portfolio providing visibility to portfolio cashflow and exposure analysis; and document generation for wealth managers to download reporting PDFs.
The firm has also announced a partnership with Seba Bank which becomes the preferred partner to extend their product offering on digital assets and providing them with associated content through the Parity platform.
ICE launches clearing for CDS index options
Intercontinental Exchange (ICE) has launched clearing for credit default swap (CDS) index options to bring greater capital efficiencies, price discovery and risk management to the CDS market.
The exchange’s ICE Clear Credit now offers clearing of index options on the CDX North American investment grade and high yield indices. The firm said index options on the iTraxx Europe indices are expected to be added in 2021.
The new solution allows market participants, dealers and buy-side firms to perform to ‘establish a robust and transparent price discovery process’ via an extension of its current end-of-day approach to single name and index clearing to determine executable mark-to-market levels for CDS index options and provide access to these daily prices.
ICE has also extended the Monte Carlo simulation portfolio framework within its CDS risk management system, Pace, to higher order CDS derivatives to help determine margin levels across portfolios.
ICE Clear Credit cleared nearly US$25 trillion two-sided notional amount of CDS instruments, representing and 11% growth over the same period in 2019.
Research Affiliates rolls out multi-factor climate transition indices
Smart beta specialist Research Affiliates has unveiled a new index strategy that integrates climate transition considerations within its existing multi-factor equity approach.
The Rafi multi-factor climate transition index series is designed to support the transition to a low-carbon economy while maintaining the potential for long-term outperformance through tapping into well-researched factor risk premia.
The strategy provides diversified exposure to value, low volatility, quality, and momentum factors while simultaneously incorporating objectives related to greenhouse gas emission reductions.
Each index complies with the requirements for the Climate Transition Benchmark as specified by the EU Commission’s Technical Expert Group on Sustainable Finance.
These requirements include significantly lowering greenhouse gas intensity, maintain an annual reduction in carbon emissions, and exclude assets that significantly harm ESG objectives.
The indices cover a variety of geographic categories and market capitalisations and are suitable to be licensed as the underlying references for index-linked investment products including structured products and ETFs.
Rafi indices on SRP include the FTSE Rafi US 1000 Index, FTSE Rafi Europe, FTSE Rafi Hong Kong/China Index, FTSE Rafi Canada, FTSE Rafi Japan as well as the BetaShares FTSE Rafi Australia 200 ETF.