Some encouraging headlines came out this past week, with positive news out of the US, Malaysia, South Korea and the UK.

BMO’s former head of global structured products and fixed income, currencies and commodities Deland Kamanga has been appointed new group head, BMO Wealth Management and joins the bank's executive committee. He will lead the strategic direction of BMO Wealth Management, including Private Wealth Canada (BMO Nesbitt Burns and the private banking business), US Wealth Management, BMO Global Asset Management, BMO InvestorLine and BMO Insurance. He will report to Darryl White, CEO, BMO Financial Group

Another headline from the Americas highlighted that the number of hybrid-linked structured products in the US market has seen a significant uptick in 2021. The SRP database has recorded a spike in the volume of hybrid-linked structured products during 2021 with sales volumes across the US market amounting to US$3.3 billion across roughly 1,322 products to-date, a 33% increase from US$2.5 billion (1,584 products) in sales during 2020.

US platform Simon has announced record increases in its structured investment broker-dealer volumes. It has expanded its digital presence over the past year by entering the annuities, defined outcome and cryptocurrency industries and onboarding several partners that include Fidelity Investments, AIG Life & Retirement and NYDIG.

The platform has reported a 130% year-over-year in broker-dealer volumes and a 400% increase in annuities volumes in its third quarter earnings of 2021.

SRP data shows that as a third-party distributor, Simon distributed just over 3100 structured products across the US market in 2021 to-date worth US$11 billion. Popular issuers of these products are GS Finance (2,416 products/US$5.7 billion), J.P. Morgan Chase Financial (131 products/US$891m), Morgan Stanley Finance (117 products/US$825m)

A jurisdiction that has seen some growth in recent months is Malaysia. In the past 10 months, the turnover of Bursa Malaysia-listed structured warrants has reached MYR71.3 billion (US$16.9 billion), accounting for half of the turnover in 2020, and 76% down compared to 2019.

Philip Lim, head of equity derivatives at Kenanga Investment Bank, told SRP structured warrant investors were attracted to the 0.1% stamp duty exemption from Bursa Malaysia - the promotion was valid for three years until the end of 2020. Kenanga is the second largest issuer of Malaysian structured warrants with a 20.6% market share based on the turnover from January to October, following Macquarie Securities’ 40.3% market share. Since its foray into the Malaysian market in 2014, the Australian house has been a dominant player as the main provider of structured warrants linked to Hong Kong equities, particularly the Hang Seng Index, which formed three quarters of its 10-month turnover, or MYR21.1 billion.  

The subsidiary of Busan Bank has issued eight principal-protected structured products since August as its net income in Q3 21 doubled year-on-year (YoY). BNK Securities has made its first foray into the South Korean structured products retail market with a new range of products delivered through different local wrappers. The products comprise seven derivative-linked bonds (DLBs) linked to the 91-day certificate of deposit rate (CD91) and an equity-linked bond (ELB) linked to the Kospi 200 index, according to SRP data. The products which have a tenor of three months, include seven public offerings and one private placement.

Barclays has poached the veteran equity derivatives banker as it bolsters its institutional sales in Asia and the Middle East. Stéphane Goursat has relocated to Dubai following his appointment by Barclays as head of equity derivatives (EQD) institutional sales for the Middle East and Asia ex-Japan.

Goursat parted ways with Credit Suisse after five years, in a role where he was the head of investment solution sales for Asia based in Singapore. His last day at the Swiss bank was 8 October, according to the Monetary Authority of Singapore register.

No round-up is complete without a look at ESG news. This week, HSBC has deployed up to 13 ESG underlyings in its range of sustainable structured products. HSBC has partnered with Euronext and Iceberg Data Lab to launch the Euronext ESG Biodiversity Screened Index series, ‘the first investable biodiversity screened benchmark indices based on a broad range of equities’.

On the regulatory side of things, the European Parliament has adopted formally the European Commission's proposed ‘quick fixes’ to amend both the Ucits directive and Priips regulation.

The vote gives the green light to the revised Level 2 measures to all Packaged retail investments and insurance-based products key investor document (Priips KIDs) from 1 July 2022. This will require all in-scope Undertakings for Collective Investment in Transferable Securities (Ucits) management companies to provide EEA retail investors with a Priips KID from the same date onwards, a task which should not be underestimated given the significant differences between the Priips KID and the Ucits KIID which is currently produced by the fund management industry.

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