It’s been a week of continued staff movements in Apac, tech developments and continued Libor legacy questions.
HSBC has onboarded several senior hires at its wealth and personal banking (WPB) business in Apac, including Irene HY Chen who joins from Citi where she was head of cross-asset solutions for Asia. This is the latest staff appointment as the UK bank continues to expand its wealth and personal banking franchise in the Apac region.
Effective 1 August, Chen will join the bank as global head of ultra-high net worth solutions at the investments and wealth solutions division within the WPB business. She will continue to be based in Hong Kong SAR and report to Karl Faivre, head of IWS Emea (ex UK) and Switzerland at HSBC.
Also in Apac, the joint venture between Siam Commercial Bank (SCB) and Julius Baer, SCB Julius Baer, has set up a new wealth management team in Bangkok, led by Varisa Labanukrom.
With over 20 years of experience in the financial sector, Labanukrom joined from SCB’s private wealth arm SCB private banking. Prior to that, she worked at SCB Asset Management, Kasikorn Bank and Kasikorn Asset Management.
Fabiano Romeiro, managing director and global head of Private Investors Product Group engineering, has left Goldman Sachs, SRP has learned. Romeiro was responsible for the distribution of securitised, OTC derivatives and structured products to retail clients across Emea, Americas and Asia, both directly via public distribution and indirectly via third parties since January 2016. Romeiro joined Goldman Sachs in 2010 as an executive director, derivatives analysis covering commodities, equities and fund derivatives, and was promoted to managing director in 2012.
Tech events continue making headlines. US multi-issuer structured products and annuities platform Luma Financial Technologies has partnered with the Nasdaq Fund Network to assign standardised identifiers to structured products. By assigning identifiers to structured products for the first time, Luma and the Nasdaq Fund Network are putting structured products into the same category as stocks, ETFs and mutual funds. The new identifiers, which will resemble the mutual fund symbology will assign structured products seven characters.
DeFi Technologies’ digital asset exchange-traded products provider Valour has launched the Seba Valour Metaverse Index (SVMETA) in collaboration with Seba Bank and MVIS. The new investable index for tokens building for the Metaverse is now available for trading OTC. The SVMETA index (ISIN DE000SL0F989) is an investable index for tokens building for the Metaverse that provides exposure to crypto assets related to gaming, entertainment and social interactions within the virtual and augmented reality world.
Bank of Singapore, OCBC Bank’s private banking arm, has seen a six-fold increase in the traded notional of fixed income-linked structured notes and minimum redemption notes on equity from January to April compared with 2021.
Conservative offerings such as capped floored floaters which will be redeemed with full principal protection at maturity and allow investor to receive a minimum coupon and potentially higher coupons subject to the prevailing interest rates have seen increased momentum.
The appeal is simple - if the spread between the 30-year USD constant maturity swap (CMS) and two-year USD CMS, which refer to the secured overnight financing rate (SOFR) - is above a pre-determined level on an observation date, the enhanced coupon for that day becomes payable.
The SRP database still lists 217 USD Libor products across 16 national databases maturing before the USD Libor cessation date of 30 June 2023, including 24 US jurisdiction products worth US$235m. The major payouts across all databases are some form of floater (US$2.3bn), range (US$958m), or accrual (US$900m).
Bigger by far is the volume that matures after the Libor cessation date: 829 products across 16 different SRP databases, including 520 products worth US$3.6 billion in the US. Again, the much-debated range accrual payoff is prominent. It’s not clear how much of this has a discretionary route to transition, and how much might be classified ‘tough legacy’ volume. Relieved by recent regulatory and legal developments, lawyers and bankers helping transition the huge USD structured products books away from Libor have stopped quoting how much of the estimated US$15 trillion outstanding in ‘tough legacy’ contracts rests on their shoulders.
“It’s still a big number, but we now have legislative solutions for a US dollar US- or New York law-governed US dollar Libor note… so I think people aren't really so much worried about the upcoming USD Libor cessation,” says Bradley Berman, who represents structured product issuers as counsel in Mayer Brown’s New York-based Corporate & Securities practice.