As of the end of Q3, Mayer Brown has advised on over 2,500 trades reflecting a notional in excess of US$20.6 billion.

The trades Mayer Brown advises on, which comprise both Securities and Exchange Commission (SEC) registered and exempt issuances, come from a broad range of foreign issuers, including Canadian, French, Swiss, Spanish and Japanese issuers. 

Clients include Banco Bilbao Vizcaya Argentaria (BBVA), Bank of Montreal (BMO), BNP Paribas, Canadian Imperial Bank of Commerce (CIBC), Credit Agricole, HSBC Bank, Mizuho, National Bank of Canada (NBC), Nomura, Société Génerale, Toronto-Dominion Bank and UBS.

“It's been a good year, flat to 2022. There’s more focus on proprietary indices, which is a continuation of what we've seen in the last two to three years,” Anna Pinedo (pictured), partner at Mayer Brown, told SRP.

“The SEC continues to express concerns regarding the sales of complex products" - Anna Pinedo, Mayer Brown

Pinedo, who leads the firm’s securities and derivatives team, noted that there is “more pronounced and continued interest” in ESG indices, decrement indices and indices that are based on machine learning or artificial intelligence (AI).

“ESG-linked structured product is absolutely still very much wanted by clients, and banks are striving to put together indices that address this investor need,” said Pinedo. “There’s been regulatory scrutiny related to it in the US, but it's not going away anytime soon given investor interest.”

“We’ve also seen a trend that US banks expand into specific countries in Latin America selling to HNWIs, such as in Brazil,” she said.

Mayer Brown also advises on structured note platforms and automation, including its advice to multi-issuer platform, Halo. 

The law firm currently houses 58 lawyers across eight offices specialising in structured products and derivatives.

Regulatory landscape

On the regulatory front, the SEC continues to express concerns regarding the sales of complex products by broker-dealers and registered investment advisers. “There are several issues that US regulators continue to focus on, such as on sales of ‘complex products’,” noted Pinedo.  

Last March, the Financial Industry Regulatory Authority (Finra) issued Regulatory Notice 22- 08 (Complex Products and Options), which is its 'most significant statement on sales of complex products since 2012’.

“The SEC continues to express concerns regarding the sales of complex products by broker-dealers and registered investment advisers, as well as in the sales of products that raise potential conflicts of interest,” said Pinedo. “Those are the principal issues.”

On 7 February, the SEC Division of Examinations announced its 2023 Priorities, an annual report designed to provide insights into its risk-based approach. Two of these are the new investment adviser and investment company rules and registered investment advisers (RIAs) to private funds.

Beyond structured note issuances, the law firm has acted as legal counsel in pioneering products such as structured unit investment trusts (UITs) for iCapital’s M+ funds, and has also worked with issuers using Simon, a fintech company owned by iCapital,

“In the annuity market, there’s been tremendous growth both in fixed index annuities [FIAs] and registered index linked annuities [Rilas] in large measure because annuities have become much more important for retirees and those on a fixed income as the US population is ageing,” said Pinedo.

“All of those products are linked to indices, which tend to be proprietary indices, and offer returns that are similar to the returns offered by structured products,” she noted.

Athene Annuity & Life, through CIBC, is among the annuity providers that Mayer Brown has worked with on the licensing of proprietary indices in the past year.

On 29 September, the SEC proposed a tailored registration form for Rila offerings in an attempt to help investors ‘make informed investment decisions’ through plain English given the complexity and growing popularity of Rilas.

Mayer Brown is assisting clients on comment letters on the proposal, expected in the next three to six months, according to Pinedo.