In The News: Russian bank includes structured notes in new investments app with robo service

Tinkoff Bank has launched Tinkoff Investments Premium offering access to over 10,000 global securities -the most extensive catalogue in the Russian market, and providing personal manager services directly in the mobile app.

Transactions with securities from Tinkoff Investments’ basic catalogue are subject to a 0.03% fee, while trading in stocks, unit investment funds, ETFs or depository receipts included in the extended list comes with a 0.3% fee. A fee of 1–2% applies to trades involving bonds, Eurobonds, structured notes or other financial instruments.

The product range of Tinkoff Investments Premium has been expanded to offer access to more than 10,000 securities of issuers from 30 countries (hundreds of foreign ETFs, Eurobonds, including from the high-yielding emerging markets, foreign stocks and bonds, etc.).

One of the service’s key features is that there is no minimum entry threshold linked to the account balance. A monthly subscription (RUB 3,000) is needed to access the basic catalogue of securities within Tinkoff’s premium service. No fee is charged for the first month. The full catalogue is only available to qualified investors. After obtaining that status via the mobile app’s chat, a Tinkoff Investments Premium customer is presented with unlimited investment opportunities.

“We are positive about the prospects of our premium investment tool and expect it to win up to 5% of Tinkoff Investments customers in 2019,” said Alexander Emeshev, vice president, new products development at Tinkoff Bank.

Luzerner Kantonalbank rolls out ‘centre of expertise’ for structured products, joins SSPA ranks

The Swiss Structured Products Association (SSPA) has welcomed Luzerner Kantonalbank AG (LUKB) as a new member and issuer. With the accession of one of Switzerland’s biggest cantonal banks, the Swiss trade body currently has 16 issuers and a total of 36 members, ranging from the buy-side to markets and partners.

Founded in 1850, Luzerner Kantonalbank AG (LUKB) is one of Switzerland’s biggest cantonal banks and also one of the country’s leading commercial banks. The LUKB’s main business areas are real estate and business financing, as well as private banking. The bank is seeking to launch a centre of expertise for the development and issuance of structured products in the course of this year, and plans to further expand its product offering in the investment business sector. At the same time, it intends to broaden its earnings base in this way.

‘Through our newly established centre of expertise, we keep our finger on the pulse of the markets, identify new trends and issue structured investment solutions on a very robust basis,’ said Claudio Topatigh, head of the structured products centre of expertise at LUKB. ‘That enables us to create sustainable added value for investors.’

The bank has been a marginal player in Switzerland’s retail structured products market with just 35 products marketed over the last 10 years, including 11 products issued by Lehman Brothers.

Wells Fargo Securities requests French license in preparation for Brexit

Wells Fargo & Company, has applied for an investment firm license from the French Prudential Supervision and Resolution Authority (Autorité de Contrôle Prudentiel et de Résolution; ACPR), which is responsible for supervising the French banking and insurance sectors, for Wells Fargo Securities, which houses the bank’s structured products business.

This announcement is part of the company’s Brexit strategy, which is predicated on supporting the capital markets and investment banking needs of Wells Fargo’s customers in a post Brexit environment.

‘With Brexit on the horizon, Wells Fargo is committed to providing a transition, which is as seamless as possible, for its markets and investment banking customers within the European Union (EU) and European Economic Area (EEA),’ said Alicia Reyes, head of Wells Fargo Securities in Europe, Middle East and Africa. ‘Wells Fargo has been present in Europe for many decades, and during this time, we have strengthened our relationships with our local authorities and deepened our customer base. Through Wells Fargo Securities Europe, we expect to leverage our network in the region and beyond by establishing a Paris hub in continental Europe.’

Subject to regulatory approval by the ACPR, the investment firm license will be held by Wells Fargo Securities Europe (WFSE) in Paris, France. It is intended that WFSE - which will be a new subsidiary of Wells Fargo - will offer a range of capital markets and investment banking services to its European and international customers that require access to the EU and the EEA.

Authorised and regulated by the UK Financial Conduct Authority (FCA), Wells Fargo Securities International Limited (WFSIL) is currently the Company’s broker dealer in the UK and provides equities; fixed income, currencies sales and trading; futures clearing and execution; debt capital markets origination; and investment banking advisory services to customers within the EU/EEA. Post Brexit, when Britain leaves EU in March 2019, customers from the UK and most non-EU markets will continue to be served in the UK by WFSIL, said the bank in a statement.

Goldman shares rise as rivals line up to take stakes in bank's 'Simon' investing app

Goldman Sachs shares jumped two percent after word it has lined up rival banks to take stakes in its three-year-old app devoted to selling complex investment products, according to CNBC.com.

The Wall Street firm has been mulling a spinoff of the app, called Simon, for some time. JP Morgan Chase, Barclays, HSBC Holdings, Credit Suisse, Wells Fargo and Prudential Financial were in advanced talks to take stakes in the business, valuing Simon at about US$100 million, a source familiar with the matter reportedly said. The Wall Street Journal first reported the talks.

Simon was developed as a web-based operation to sell complicated bond-like investments to retail investors through brokers. The idea was to get rival banks to sell the investment products, called structured notes, to retail brokers through the app, but Goldman's ownership kept competitors at bay. Getting outside owners on board was seen as a way to boost the use of the app.

Goldman has been opening its home-grown technology to outsiders for a few years. Five years ago, it sold a majority of its REDI trading technology, which is used by hedge funds and other money managers, to a group of banks using a similar rationale.

Structured notes have gained in popularity with investors as an alternative to bonds. Morgan Stanley and Bank of America announced their backing of a rival structured notes sales platform called Luma in July. WSJ cited data that US$55 billion of the investments were sold in the US last year, up from US$37 billion in 2016.

American Equity launches new fixed index annuity

American Equity Investment Life Insurance Company, a US underwriter of index and fixed rate annuities, has launched a new fixed index annuity product to its competitive product portfolio. The AssetShield offers multiple allocation strategies, strong growth opportunity potential and increased liquidity options for added access to and control of money when clients need it.

‘Our new product is focused on accumulation while maintaining the core retirement need of asset protection. It has a 175 percent participation rate on the S&P 500 Dividend Aristocrats with a two year point-to-point indexed strategy,’ said Kirby Wood, chief distribution officer of American Equity. ‘This new product has the advantage of being uniquely suited for retirement saving growth potential.’

The AssetShield, with 5, 7, and 10 year terms available, offers multiple index crediting allocations – all backed by S&P indices, plus added access features for increased asset control. It also features the standard benefits of a fixed index annuity, including principal protection from index volatility and tax-deferred growth potential.

SRP data shows that there are more than 100 products in the US market featuring the S&P 500 Dividend Aristocrats Daily Risk Control 8% index worth US$185.4m, of which 13 were sold in combination with the JP Morgan ETF Efficiente 5 index.

Monaco boutique expands in Zurich

Privatam, a Monaco-based finance boutique has established a Swiss subsidiary to sell structured products to independent asset managers and banks. The boutique has now opened an office in Zurich, which will be led by two former investment bankers, according to Finews.com.

Thibault Pons, previously employed for 10 years at Societe Generale, and André Schlegel, who worked for seven years at UBS' investment bank. Privatam was founded in 2014 by investment bankers in Monaco, and specializes in the development and structuring of cross-asset-solutions. Privatam currently employs 30 staff and sells its services to independent asset managers, banks and professional investors.

Privatam plans to offer its services across Switzerland and will expand it staffing in the country. With a volume of 175 billion francs (US$176.3 billion) in the first half of 2018, Switzerland represents the biggest market in the world for structured products.

‘New technology will increasingly influence the future of investing. Therefore Privatam has developed its own in-house applications to simplify the investment processes for clients. We’re independent, and operate in partnership with our clients and can put our vast experience to use in meeting client needs,’ said Pons.