The Dutch structured investment product association calls out the regulator over the treatment of turbos, while Investec calls it a day in the UK.
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Starting with recent regulatory developments…
The Netherlands Structured Investment Products Association (Nedsipa) has written an open letter to the Dutch Authority for the Financial Markets (AFM), in reaction to a consultation held by the regulator in December on measures restricting the marketing, distribution or sale of turbos in the Netherlands. The restrictions for turbos proposed by the watchdog cover three of the five restrictions that already apply for the sale of contracts for difference, which the AFM sees as similar to turbos: a leverage limitation, a mandatory risk warning and a prohibition on incentives offered to trade in turbos.
US holders of publicly traded securities or securities derivatives providing investment exposure to designated Communist Chinese Military Companies (CCMC) will have to divest following an executive order banning such transactions as of 11 January 2021. However, retail investors in structured notes will not be impacted as there are only eight live structures linked to the CGN Power share in the US market. The 36 structured notes sold in the US market linked to China Mobile and China Telecom worth US$304m have all matured.
One of the major headlines in the past week was the announcement Investec Bank will stop any further retail structured product plans in the UK retail market from April 2021. The next launch, which takes place from 15 February 2021 to 1 April 2021, will be Investec’s last set of structured plans brought to market. All existing plans, including all investments into Investec’s range of plans, are unaffected by the bank’s decision, the Anglo-South African bank said in a statement. Investec’s decision to cease offering new retail structured products reflects its shift in focus to its core services for Financial Advisers: Discretionary Fund Management and Managed Portfolio Services on Platforms.
Société Générale posted revenues of €5.8 billion in the fourth quarter of 2020, up 1.6% from Q3, but a 2.3% decrease compared to the prior year quarter. The bank reported a progressive recovery in structured products during the fourth quarter of 2020. Flow and hedging activities enjoyed strong volumes in Q4 and the Asia region performed well in all products.
The group’s structured products had been hit hard by the market dislocation in H1 2020, although losses were mitigated by the increased revenues for listed products and equity flow products. Revenues rebounded in H2, in a normalising market environment. In 2020, a strategic review carried out by the group of its global markets business contributed to reducing the risk profile on equity and credit structured products in order to reduce the sensitivity of global markets’ revenues to market dislocations. A cost reduction plan was also launched in 2020.
BNP Paribas has changed its management team to maximise ‘synergies and efficiency in retail activities, accelerating its development in the area of savings, and stepping up the pace of business development with corporate and institutional clients (CIB)’. These changes will take effect on 18 May.
As part of the changes Thierry Laborde, chief operating officer, will take on responsibility for all the group’s retail activities, including domestic markets, international retail banking and BNP Paribas personal finance. Yann Gérardin will continue to head CIB alongside his new responsibilities as chief operating officer.
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the appointment of Nicolas Aguzin as chief executive of HKEX, effective 24 May 2021 for a term of three years, subject to the approval of the Securities and Futures Commission (SFC).
Aguzin joins HKEX from J.P. Morgan, where he is currently chief executive officer of its International Private Bank and a member of the operating committee for the firm’s asset and wealth management business.