Leonteq and Raiffeisen Switzerland Cooperative have extended their existing structured products cooperation agreement, which will run until 2026, by four years to 2030.
The two firms have refocused their cooperation to account for developments within the two companies to date. As a result all guarantees issued by Raiffeisen to Leonteq counterparties over the last few years and the existing credit facility provided by Raiffeisen to Leonteq have been terminated.
With the extension of the agreement Raiffeisen is seeking to expand its pension and investment activities and plans to begin issuing, hedging and distributing some of its structured products itself via a new Raiffeisen platform in the second half of 2022. It will be connected to Leonteq's existing service and technology platform - the extension of the cooperation is subject to the successful implementation of the technological connection by the first quarter of 2023.
Raiffeisen is one of Leonteq's largest white-labelling partners in terms of the volume of products outstanding.
‘[The] cooperation has proved beneficial for both parties,’ said Roger Reist (pictured), head of corporate clients, treasury & markets, Raiffeisen Switzerland.
Leonteq expects its annual net fee income to decrease by around one percent because of changes to the cooperation agreement and no material financial impact.
SIX onboards new issuer, reports CHF20bn trading turnover
SIX has added Swissquote as the 23rd issuer for structured products at SIX Swiss Exchange.
The Swiss provider of structured products Swissquote, which entered into a cooperation agreement with Leonteq in mid-January for the manufacturing and distribution of structured products has listed a 13.00 % p.a. Callable Multi Barrier Reverse Convertible (CH1160782665) linked to the shares of Logitech and Temenos Group.
The Swiss Exchange has reported a trading turnover of CHF20.1 billion (US$21.7bn) and 778,030 trades in the structured products and warrants segment in 2021. By the end of December, there were 41,269 structured products and warrants available to investors, according to the exchange.
Peter Rosenstreich, head investment products at Swissquote, said the goal to become an issuer for structured products highlights the firm’s evolution.
‘Listing our products at SIX Swiss Exchange will be the key catalyst for the further development of our retail and institutional offerings,’ he said.
As reported, the Swiss bank had a busy end of 2021 after licensing the Swissquote Metaverse index for a Leonteq tracker certificate listed on the SIX Swiss Exchange and two other Leonteq trackers linked to the Swissquote Decentralised Finance (DeFi) Cypto Basket and Swissquote Smart Contract Platforms Crypto Basket.
BNPP hands out US$170k of structured products proceeds to non-profit organisation
BNP Paribas has donated US$170k donation to The Forgotten International, an independent non-profit developing programmes to alleviate poverty, following a philanthropic campaign run by the French bank’s Americas structured products distribution team throughout the last quarter of 2021.
The donations raised from the campaign will serve to fund projects at La Comunidad de Niños Sagrada Familia, a large school, orphanage, and medical clinic in Peru, housing over 1,000 children.
The donation made by BNP Paribas constitutes a portion of the proceeds from all structured notes issued by the bank to clients in the Americas over the course of the last three months of the year.
‘In total, the funds will provide roughly 250,000 meals for children at La Sagrada Familia,’ stated the bank in an announcement.
Former ANZ unit hit with A$6m fine for dodgy advice
The Federal Court of Australia has ordered RI Advice Group to pay a A$6m (US$4.2m) penalty for ‘failing to take reasonable steps to ensure that its authorised representative, John Doyle, provided appropriate financial advice, acted in his clients’ best interests and put clients’ interests ahead of his own’.
The former financial adviser and authorised representative of RI Advice was ordered to pay an A$80,000 penalty after he inappropriately advised clients to invest, and stay invested, in complex structured financial products.
According to court documents, the adviser received upfront and ongoing commissions for each of his clients’ investments in the structured products. ‘Doyle accepted commissions from providers of “structured products” (bundled packages of securities, options and derivatives) such as Macquarie and Instreet’.
‘These complex products were not suitable for Mr Doyle’s clients, many of whom were approaching retirement. Asic deputy chair Sarah Court said. ‘The $6 million penalty handed down by the Court against RI Advice sends a strong message to financial services licensees to properly monitor the advice given by their advisers to make sure consumers are protected.’
RI Advice was, until its acquisition by IOOF in 2018, an ANZ financial advice business.
Investors flock to 3x short ETPs
ETP provider GraniteShares, which offers a range of 3x short and 3x leveraged ETPs on UK, US, and European stocks, has seen a 166% rise in trading in its range of short ETPs as sophisticated investors sought to capitalise on the recent market sell off and hedge portfolios against market falls.
The firm reported that assets under management (AUM) in 3x short ETPs increased by more than 50%. The most active short ETPs have been Tesla (3STS), NIO (3SNI), NVIDIA (3SNV), Uber (3SUB) & Meta (3SFB)
‘The surge in trading volumes we’ve witnessed on our Short ETPs in January demonstrates increasing willingness by sophisticated investors to take action in volatile markets to hedge risk or to profit from falling prices,’ said Will Rhind, CEO at GraniteShares.
Total trading at GraniteShares hit $1.7 billion last year across its range of products listed on the London Stock Exchange, Euronext and Borsa Italiana compared to US$130.7 million in 2020.
The most popular trades were GraniteShares 3x Long Tesla (3LTS) and GraniteShares 3x Long Rolls-Royce (3LRR) which saw US$581 million and US$255 million traded across the year, respectively.
Most investors went long, with 76% of investors holding long positions compared with 24% who took short positions. Year to date, investors have been selling more speculative assets such as unprofitable technology companies, cryptocurrencies and meme stocks, said Rhind.