We want to increase the security and stability of the regulatory environment, Belsipa

The Belgian Structured Investment Products Association (Belsipa) elected Gilles Staquet (pictured) as its new chairman last month. Staquet, who is head of equity derivatives sales Belgium & Netherlands at the global markets division of BNP Paribas, succeeded Alain Flas of ING, who had chaired the association since its inception in 2013.

SRP spoke to Staquet about the trade body's objectives, the impact of regulation and the current state of the Belgian market.

The first priority of Belsipa, for the long term and also the very short term, is to increase both the security and the stability of the regulatory environment for structured products in Belgium, according to Staquet. "These are two different things: security and stability," says Staquet. "We don't want the rules to change all the time but we would like to have clear rules. I would say that the regulatory environment has been quite challenging on these dimensions recently."

The second priority, which is just as important, according to Staquet, is to continue to promote structured products as an investment solution for retail investors. "We remain absolutely convinced that structured products are one of the most attractive solutions to invest in the financial markets, because they are cost-effective and there is no management uncertainty, having a pay-off based on a formula," says Staquet.

Belsipa, which is a member of Eusipa, the European umbrella association, is looking at regulation both on a local and European level, says Staquet. "But since we are a Belgian association I guess we will focus more on local regulations [...] if there is work to be done on a European level we will more likely go through Eusipa."

2016 has been a pretty stable year for the Belgian structured products market with primary market turnover dominated by notes while funds dominated the secondary market; outstanding volume and total number of products were stable throughout the year, as were the number of new products, according to Belsipa statistics which confirm that, at the end of last year, €33.7bn was invested in structured products by Belgian retail investors.

"We are now working on the figures for Q1 2017 and I would expect the figures again to be fairly stable," says Staquet adding that this is a combination of two factors. "First of all the fact that the financial markets have been up during Q1 is always a positive factor for the sales of structured products.

"At the same time, last year the figures were stimulated by the fact that there were a lot of redemptions, including some vanilla structures like the Leterme Bond which amounted to several billions of euro and came to maturity in 2016," says Staquet. "These redemptions really fuelled the volume of structured products sold in 2016 [...] all in all, I would say that these two effects offset each other, but we will know more as soon as we have the official figures for Q1 2017."

Belsipa members Belfius, BNPP Fortis, ING Belgium, KBC, Societe Generale, Commerzbank and Natixis all contribute with data for the association's quarterly market statistics. In addition, non-members such as AG Insurance, Axa, Crelan,Deutsche Bank and Bank Nagelmackers, also provide data for the market reports. "These distributors contribute data but are not necessarily going to become members since they are not manufacturers of structured products," says Staquet stressing that Belsipa is really meant to be an association of manufacturers. "It is quite nice that some of these players, even though they are not members of Belsipa, still contribute data to our market survey, because it gives everyone a better view about what is going on in the market."

There were 327 structured products targeted at retail investors launched in Belgium during 2016, according to SRP data. The products, which had a combined sales volume of €5.1bn, were distributed via 12 different distributors of which KBC (89 products), BNP Paribas Fortis (52), Belfius and Deutsche Bank (48 each) and BPost Bank (36) were the most active.

Equities remained the dominant asset class: the 171 products linked to a single index racked up sales of €2bn during the course of the year, followed by 71 products linked to a basket of shares (€1.9bn). There were also 58 products linked to the interest rate (€841m) and 25 products linked to a fund (€248m).

Click the link to view the full Belsipa market report on retail structured products for Q4 2016.

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