Latest: Finra fines CS over inaccurate reports

The Financial Industry Regulatory Authority (Finra) has handed down a censure and a fine of US$900,000 to Credit Suisse Securities (USA) for reporting around 9,000 late trades and hundreds of thousands of inaccurate reports, which cover the period from November 2015 to March 2023, according to a regulatory authority letter released on 23 June.

This matter originated from Finra’s review of the firm’s Trace reporting and certain self-reports made by the firm

The reports were filed to The Reporting and Compliance Engine (Trace) and the late trades were primarily securitised products. From July 2016 to June 2021, the Swiss bank also failed to ‘timely provide notice to the US regulator for nearly 190 new issue offerings in Trace-reportable securities’. This matter originated from Finra’s review of the firm’s Trace reporting and certain self-reports made by the firm.

In February, New York-based UBS Securities also agreed to pay US$475,000 for publishing inaccurate monthly statistics on execution of its covered orders between September 2015 and January 2019.

Goldman Sachs was hit even harder in April, when it was ordered to pay a US$3m fine for mislabeling about 60 million short orders as long orders between October 2015 and April 2018.

ING lists first turbo certificates on US stocks in Warsaw

The first batch of turbo structured certificates on US stocks became available for trading on the Warsaw Stock Exchange (GPW) on 29 June. They cover Alphabet (Google), Amazon, Apple, Nvidia, and Tesla.

Issued by ING Bank, the new products add to the existing 37 underlying instruments tracked by the listed certificates on the Dutch bank's book. The underlyings include shares of the biggest Polish and foreign companies, leading indices of selected global exchanges, commodities and currency pairs. Turbo certificates, which were first introduced by ING in the Netherlands in 2008, are structured products that allow investors to make returns to the upside and the downside of the price of the underlying.

There are plans to further expand the range of available US stocks,’ stated the GWP where the underliers of the certificates currently include shares of the biggest Polish and foreign companies, major indices of selected global exchanges, commodities and currency pairs.

Investors turn to alternatives led by PE and structured products

Investment professionals have diverse approaches to using alternatives for their clients where structured products (20.9%) being the second most favoured asset class after private equity funds (23%), the 2023 Trends in Investing Survey conducted by US' Financial Planning Association in February and March shows. These were up from 10.9% and 12.3%, respectively from 2019.

Of the 191 qualified respondents, 28% said they were actively investing in or searching for alternatives and 30% said they were familiar with these types of vehicles but didn’t intend to invest in them, while 19% said they were keeping up with current research on alternatives and potentially dedicating a portion of their clients’ portfolios to the asset class in the next 12 to 24 months but hadn’t done so yet, according to the annual survey.

Additionally, 11.5% of the respondents expect to increase their use or recommendation of structured products in the next year, an increase from 5.6% in the 2019 survey. Meanwhile, 1.6% of the respondents expect a decrease, up from 1.3% in 2019.   

JPM rolls out sustainable investment data solutions

J.P. Morgan Securities Services on 13 June revealed the launch of its sustainable investment data solutions for institutional investors, available through Fusion. The solution will enable investors to readily extract value from sustainable investment data supplied by providers through technology-enabled normalisation, management, calculation, and screening capabilities, according to the bank.

The new solutions aim to ‘provide quick and seamless access to normalized data across providers while offering investors the flexibility to manage, screen, and create customized metrics with easy-to-use tools’. Fusion, which has partnership with data providers including Bloomberg, Equileap, FactSet, ISS ESG, MSCI, RepRisk, Revelio Labs, S&P Global, and Sustainalytics, will accelerate the ability for investors to perform analysis, scoring, stock-selection, compliance monitoring, and reporting.

‘Data for sustainable investing is particularly challenging given its scale, inconsistency, and incompleteness,’ said Gerard Francis (right), head of data solutions at J.P. Morgan. ‘Fusion combines data, technology, and service at scale, to enable investors to extract value in minutes instead of months.’

UBS Tokenize goes live 

Early in June, UBS originated CNH200m (US$28m) digital structured notes for Bank of China International (BOCI), marking the first Chinese financial institution to issue a tokenised security in Hong Kong SAR.

In a follow-up, Aurelian Troendle (right), Global Head of MTN Trading at UBS, told SRP that the transaction is the maiden production of UBS Tokenize, the Swiss bank’s tokenisation service building on a product framework and its in-house blockchain technology. “From here we are expanding the offering with potential new issuers as well as broadening the product scope,” he said.

The product is a dual currency note with a short tenor, according to Troendle without disclosing more structure details. BOCI is the issuer while UBS is the dealer, paying agent and custodian. “More broadly, this format works for any structured and non-structured debt issuance product and has a particularly high value for high frequency issuances,” he said.

The tokenised format allows for greater operational efficiencies compared to the existing origination market for securities – from the product issuance and settlement to lifecycle automation. This unlocks the ability to issue in smaller denominations across more product offerings, and ultimately brings institutional quality offerings to a wider group of end investors, according to Troendle.

Image: Blue Planet Studio/Adobe Stock.