News shows no signs of slowing down as HSBC launches a new multi-asset index offering and Halo and First Abu Dhabi Bank collaborate on structured notes.

Switzerland’s UBS has reported net loss attributed to shareholders of US$785m in Q3 2023, against net profit of US$1.7 billion recorded in the prior-year quarter, according to the latest earnings report from UBS, which is led by CEO Sergio Ermotti.

Total revenues increased by US$1.9 billion to US$5.3 billion in Q3 23 year-on-year (YoY), mainly driven by the consolidation of US$1.9 billion of CS revenues. Meanwhile, operating expenses almost doubled to US$11.6 billion

The investment bank reported a loss before tax of US$230m in Q3 23, compared with profit before tax of US$ 447m year-on-year, mainly due to higher operating expenses associated with the CS acquisition. In Q3 23, total revenues increased six percent to US$2.2 billion mainly due to the consolidation of CS.

Singaporean banking giant DBS Group has reported strong earnings in the third quarter of the year, with net profit jumping 18% YoY to SG$2.63 billion (US$1.97 billion), according to its latest financial report.

Although the bank does not provide any structured products data from its treasury in Singapore, DBS is an active provider in several other Apac markets. SRP data shows that in Taiwan, YTD DBS Bank distributed some 5,044 structured notes worth US$12.8 billion in the estimated sales volume, topping the league table in the jurisdiction that makes up 20% of the market share.

Bualuang Securities (BLS) has collaborated with Hang Seng Investment Management to launch two depositary receipts (DR) offering exposure to the Tracker Fund of Hong Kong and the Hang Seng China Enterprises Index ETF. Both products began trading on the Stock Exchange of Thailand (SET) on 16 November. The Thai securities house also debuted the first two DRs linked to European single stocks: The luxury goods giant LVMH Moet Hennessy Louis Vuitton SE and the Dutch semiconductor firm ASML.

The HSBC Value Architect Index is a multi-asset index, and the idea behind is to modernise a traditional 60/40 portfolio allocation by introducing alternative strategies to a traditional stock/bond portfolio - David Odenath, HSBC

HSBC is gearing up for the launch of a new multi-asset index offering access to alternative investments in January. The HSBC Value Architect Index, also referred to as the Brookfield Value Architect Index (BVARCH), has received the approval to be included as the reference asset of a new fixed index annuity (FIA) offered by American National Insurance Company (Anico), according to the insurer’s filings to the Interstate Insurance Product Regulation Commission in the US.

The index is a 'next generation asset allocation strategy designed to offer diversification, growth and stability across the entire market cycle’, stated Anico, which was acquired by private equity Brookfield Reinsurance in May 2022, in the filings.

“The HSBC Value Architect Index is a multi-asset index, and the idea behind is to modernise a traditional 60/40 portfolio allocation by introducing alternative strategies to a traditional stock/bond portfolio,” David Odenath, global head of quantitative investment solutions (QIS) sales at HSBC, told SRP.

US structured products platform Halo Investing has signed a Memorandum of Understanding (MoU) to enhance First Abu Dhabi Bank (FAB) structured notes business ‘on a global scale’.

The MoU establishes a framework for collaboration between FAB and Halo in Abu Dhabi, as the largest bank in the UAE seeks to capitalise on technology innovation to improve the investment experience of its clients.

On the regulatory side of things, the head of the Korean financial watchdog has questioned whether the principle of suitability was properly observed by banks, considering that a large amount of ELS products were sold mostly to senior citizens at a particular period of time.

The Financial Supervisory Service (FSS) in South Korea has launched a probe into local commercial lenders and securities houses over the suspected ‘irresponsible sales’ of equity-linked securities (ELS) linked to the Hang Seng China Enterprises Index (HSCEI), SRP has learned. 

On Wednesday 29 November, FSS governor Bok-hyun Lee said after the Financial Services Commission regular meeting in Seoul that action was taken against seven financial companies for violating the Governance Act. Lee also said that financial companies will be held accountable for any potential mis-selling of ELS products, according to media local reports.

In the UK, the UK Financial Conduct Authority (FCA) has confirmed a substantial package of measures to improve the trust and transparency of sustainable investment products and minimise greenwashing.

The new Sustainability Disclosure Requirements (SDR) and investment labels regime comes after 12 months of engagement with a range of stakeholders, including industry, other regulators and consumer groups.

As the regulator continues to develop proposals for pension products and insurance-based investment products, the new rules which apply to structured products, prohibit firms and products that are not in scope from using the investment labels.

Structured products and green bonds have become one of the preferred vehicles to access ESG investment strategies either via green and sustainable underlyings as well as positive impact products using the proceeds to fund social and green projects.

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