This week sees trade associations sounding the alarm on new EU retail investment rules, while we learn why the number six has a special connotation of good fortune in Cantonese.
European finance trade associations released a joint statement to make some high-level remarks and express initial reasons for concern about the full range of impacts and changes put forward by the European Commission’s Retail Investment Strategy (RIS) across multiple pieces of regulation.
Some of the regulations that will be subject to the new retail investment guidelines include Mifid 2, the Insurance Distribution Directive (IDD), the Ucits Directive, the Alternative Investment Fund Managers Directive (AIFMD), the Solvency II Directive as well as the Priips Regulation.
The number 'six' has a special connotation of good fortune in Cantonese. The journey of successful trading and investing requires skills, but a bit of good luck will always helps - Paddy Cao, Huatai International
In the Netherlands, the Authority for the Financial Markets (AFM) fined online turbo provider BinckBank for not complying with EU product governance requirements.
On 1 June 2023, the Dutch regulator imposed an administrative fine of €530,000, because between December 2019 to December 2021, BinckBank did not have procedures and measures in place to ensure that clients only invested in financial products appropriate for the target market to which they belonged.
‘By not complying with the product governance requirement set by the European Union, BinckBank has been selling complex products such as turbos and options to its clients for more than two years without making it clear whether or not these clients belonged to the target market for these products,’ the AFM stated.
This year, the reverse convertible celebrates its 25th anniversary and Patrick Oberhaensli, founder and CEO of Evolids Finance, looked back at the market environment that led to the debut of the first ever RevCon structure in the Swiss market.
In Germany, the DDV published research on another longstanding and popular structured product: the discount certificate. The study examined 173,151 discount certificates on the top 70 underlyings from Germany, Europe and the US, including five indices and 65 stocks. Overall, almost 62% of the discount certificates examined generated a positive return against 39% for the respective underlyings.
Over in Asia, Huatai Securities debuted its suite of derivative warrants (DWs) on Hong Kong Exchanges and Clearings (HKEX). The new Huatai DWs comprise six products in total (four calls and two puts) and the Chinese securities house has been working on the launch since early 2021.
‘The number 'six' has a special connotation of good fortune in Cantonese. The journey of successful trading and investing requires skills, but a bit of good luck will always helps,’ Paddy Cao, head of warrants at Huatai International told SRP.
Stropro launched the Stropro Global Income Fund, the first structured fund in Australia.
The fund aims to provide accredited investors and independent financial advisors a ‘defensive, globally diversified fund of defined-income return investments’. Sixty to 80% of the fund assets will invest in fixed coupon notes (FCNs) linked to blue chip stocks with exposure to eight investment banks in Stropro's current pool with the remaining to be invested in specialist fixed income managers.
Following a soft launch for 10 clients in April, the fund has generated AU$3m seed capital, which is set to be deployed for five to six FCNs in the coming weeks – the fund is targeting AU$15m over the next three months.
More product news came from the US, where Inspire Insight, a sister company of ‘biblically responsible’ investing firm Inspire Investing, partnered with Barnabas Capital to launch the world's first biblically responsible structured notes while Luma Financial Technologies and Chicago-based SpiderRock Advisors launched a partnership to provide advisors with direct access to structured note replication strategies via Separately Managed Accounts.
In people news, Clement Florentin, the former Credit Suisse senior Apac quantitative index strategies (QIS) structurer, joined Nomura as head of equity structuring, Asia ex-Japan and head of global markets QIS structuring, Asia Pacific, according to an internal memo seen by SRP.
Bank of America (BofA) promoted Alex Bettamio, the head of its Latin America business, to co-head of global investment banking alongside Thomas Sheehan.
Bettamio’s appointment was one of several announced by the second largest US bank which has also appointed Faiz Ahmad to jointly lead global capital markets with Sarang Gadkari while Elif Bilgi Zapparoli, who currently serves as co-head of global capital markets, will become head of international client strategy, reporting to Bernie Mensah, BofA's president of international business and member of bank’s executive management team.
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