Société Générale is the latest of quite a few banks to add to its Apac team to grow its footprint in the region.
Société Générale (SG) Global Markets is setting up a local structuring team in Shanghai to capitalise on the growth potential of the Chinese market.
At least three Hong Kong SAR-based cross asset sales bankers covering China are set to relocate to Shanghai in November, including Zhenzuo Ye, director, head of cross-asset sales, China, SRP has learned.
Ye will continue to report to Xin He, head of global markets for China, who is also based in Shanghai, and assume the responsibilities of Charles Gu, ex-deputy head of global market & head of sales at SG China, who parted ways with the French bank in July to join Standard Chartered Bank.
In addition to the relocation, the investment bank is currently hiring two structurers in Shanghai, including a senior role to ‘lead SG’s structuring efforts for the Greater China area’.
Over in the EU, the UK Financial Conduct Authority is pressing ahead with tougher marketing restrictions and financial promotions rules, which could hit activity in the domestic structured products market. The UK watchdog has published a three-year strategy to strengthen consumer protections, with a particular focus on what it sees as high-risk investments.
The regulator is aiming for a 50% reduction in the number of consumers who indicate a ‘low risk tolerance or demonstrate the characteristics of vulnerability’ putting money into high-risk investments by 2025.
In the US, changes introduced by the Biden administration on capital gains rates are expected to hit structured products investors and potentially change the market landscape.
Under these anticipated changes, structured product investors are likely to be hit with higher capital gains rates. While higher tax rates make for warier investors, there are some market players toying with the idea of pushing derivative instruments that only require income reports on a yearly basis, Davis Polk & Wardwell partner Chris Schell noted. The impact that higher capital gains rates may have on the types of structured products investors gravitate towards could branch out in several directions. For instance, longer-dated instruments with tax reckonings on a later date may appear as favourable for some clients.
The indexing world saw the news that Morningstar has completed the acquisition of Moorgate Benchmarks, a London-based provider of index design, calculation, and administration. ETFS Capital provided seed funding to Moorgate Benchmarks in 2019 and had been its sole external investor. Morningstar is seeking to leverage Moorgate Benchmarks’ advanced index design, calculation and administration technology alongside its data and research to deliver ‘more customised and personalised indices, delivered faster’.
In addition to his role as Moorgate Benchmarks CEO, Tobias Sproehnle will become head of Morningstar Indexes in Europe, reporting to Ron Bundy, president of Morningstar Indexes. The additional members of the Moorgate Benchmarks executive team – Gareth Parker and Mark Pralle, will join the Morningstar Indexes leadership team and report to Sproehnle.
Swiss Financial Engineering boutique Arx Financial has launched a new ethical desk aimed at responding to client requests and build up a ‘shariah’ compliant offering, including structured products.
Led by Dermot O’Reilly, head of ethical finance at Arx Financial Engineering (Arx), the Arx Ethical Finance Desk will offer a range of ethical funds and sustainable structured investments to respond to client demand.
“This is one area that the Islamic finance space has struggled to capture,” says O’Reilly. “[We have] already started talking to clients and proposing ideas and have received a number of reverse enquiries at the end tail of meetings enquiring if it was possible to structure deals Islamically.”
Finally, some first-of-a-kind news out of Russia. Otkritie Broker, part of Otkritie Financial Group, has issued its first exchange-traded autocallable structured bond in the Russian market.
The first ever Russian rubble-denominated structured bond is available for trading on the domestic stock exchange Micex since 26 July.
This tradable issue of structured bond is a symbolic step for the development of local securitized structured product market where Otkritie is already one of the major players, according to Anton Plyasunov (pictured), head of structured products factory.
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