The SSPA onboards two new non-Swiss players and the German DDV adds pan-European MTF to pool of members; MerQube’s plans backed by investors; new protected ETF launch; FNZ outsources manufacturing capability to investors.
The Swiss Structured products Association (SSPA) has announced two new additions to its ranks.
London-headquartered Marex provides services in agency execution, market making, clearing and, hedging and investment solutions (Marex Solutions) and has carved its own space in the structured products market as a non-banking issuer.
The Swiss structured products industry as a highly developed and innovative sector will be an interesting community for a mutual exchange of ideas and experiences - Andrew Dunlop, Beacon
Marex’ SSPA delegate Joost Burgerhout, head of Marex Financial Products, said the exchange with Swiss and international structured products experts “will contribute to the advancement of the whole industry”.
The second member joining the Swiss association is Beacon, a fintech dedicated to financial services founded in 2014 and with offices in New York, London, and Tokyo.
‘The Swiss structured products industry as a highly developed and innovative sector will be an interesting community for a mutual exchange of ideas and experiences,’ said Andrew Dunlop (pictured), senior product manager at Beacon.
Marex and Beacon follow Bank of America which joined the association in late June. The SSPA now has 46 members across the entire value chain, from issuers, trading platforms and buy-side to brokers and partners.
DDV bolsters ranks with pan-European MTF
Pan-European trading venue for securitised derivatives Spectrum Markets has joined the German Derivatives Association (DDV) as a supporting member to underpin the association's work for structured products.
The DDV represents the issuers of structured securities with the aim of improving the political and regulatory framework for structured products in Germany and Europe, and to contribute to the increasing level of private investors opting for certificates and warrants.
‘The DDV membership is a significant strategic step forward for us as it is opening up the opportunity to participate in industry committees and working groups on regulatory initiatives and to share expertise developed from our pan-European trading network here,’ said Nicky Maan (right), CEO of Spectrum Markets.
Spectrum Markets has increased its presence in Europe’s leverage/inverse listed products market over the last few months –the multi-trading facility (MTF) hub onboarded UniCredit Bank as the newest issuer in its platform in May after launching new partnerships with Société Générale (SG) and Intermonte in 2022.
The addition of Spectrum Markets brings the total number of DDV members to 16th and follows the onboarding of Barclays in May.
MerQube gets further backing
Indexing technology company MerQube has raised US$22m in Series B funding - the investment round was led by Intel Capital with participation from new investor Allianz Life Ventures, and existing investors Citi, J.P. Morgan, Laurion Capital Management and UBS.
In conjunction with the financing, David R. Mueller, investment director at Intel Capital, will join MerQube’s board of directors.
MerQube’s cloud native SaaS platform and API-first solutions are designed and built to address and unlock unmet demand for index-linked investments, a market valued at US$17 trillion which is evolving rapidly with assets expected to reach US$30 trillion by 2027, according to Vinit Srivastava (right), CEO at MerQube.
‘The support of a leading technology V.C. firm such as Intel Capital will be instrumental as we deliver on our vision to close the fintech gap in passive investing by providing the best technology available to enable innovative rules-based investment solutions,’ he said. ‘The participation of a powerhouse such as Allianz Life Ventures will provide strategic direction in the insurance market as we continue to expand to meet the needs of a diverse client base.’
In May 2023, MerQube received FCA authorisation under Benchmarks Regulation (BMR) and in September 2022, it confirmed its adherence to International Organization of Securities Commissions (IOSCO) principles for Financial Benchmarks.
MerQube is one of the latest entrants to the structured products market and has established its MerQube’s US Tech+ Vol Advantage Index as one of the highest selling thematic indices in the US market – the index was used in 246 products issued via J.P. Morgan in the US worth US$74mn in 2022.
MerQube plans to deploy the funds raised to further expand its engineering capabilities and platform infrastructure, scale its talent, and continue to expand into its key markets.
Innovator deploys first ‘defined protection’ ETF
Defined Outcome ETF provider Innovator Capital Management (Innovator) has expanded its product range with the launch of the Equity Defined Protection ETF (TJUL) - a first-of-its-kind ETF designed to replicate the upside return of the SPDR S&P 500 ETF Trust (SPY) with a 16.62% cap, and a 100% protection buffer against any losses incurred by the ETF over its two-year investment period.
Investors in the US have embraced structured ETFs replicating the payoff profile of structured notes - Innovator’s suite defined outcome ETFs has over US$13 billion in AUM.
With this strategy, Innovator hopes to help investors shift their portfolios for downside risk, without having to sacrifice equity market exposure by moving to cash, according to Graham Day (right), chief investment officer at Innovator.
‘We continue to hear that investors are looking for a way to get back into the market without sitting on the sidelines, but that the level of risk is simply too high,’ said Day. ‘Our aim is for [the new ETF] to provide a way for our clients to stay in the market with significant built-in risk management.’
Day also noted that unlike fixed indexed annuities and market-linked certificates of deposit, the new ETF is expected to provide investors ‘a beneficial 1099 tax treatment’.
Innovator ETFs are distributed by Foreside Fund Services.
FNZ jumps on fixed coupon note bandwagon
FNZ, the global wealth management platform, is the latest player to enter the fixed coupon structured notes segment of the market with the launch of its FNZ Yield Plus notes.
The notes have been designed to provide professional investors with a low-risk cash alternative – the FNZ Yield Plus notes offer investors a higher yield than comparably rated government bonds with the same maturity.
The new product is also seeking to capitalise on its enhanced risk profile compared to bank deposits, with enhanced collateral security, and regular coupon payments with committed liquidity on a periodic basis (monthly or quarterly depending on the note). The notes are available in USD, EUR, GBP and may be customised for other currencies.
The notes strengthen FNZ’s global client proposition for professional investors adding a simple, yet sophisticated investment product to its existing end-to-end wealth management platform, according to Walter Cegarra (right), CEO FNZ Q-Hub.
‘We are very much looking forward to helping professional investors benefit from the right participation in the recent increases in global interest rates, while mitigating key counterparty risks,’ said Cegarra.
The FNZ Yield Plus notes which can also be customised, white-labelled, and curated for distributors is targeted at treasury and ALM departments of corporates, pension funds, banks, insurance companies, asset managers as well as professional clients of private banks and wealth managers.
According to Adam Green, CEO of Global Asset Management Solutions at FNZ, the launch of the FNZ Yield Plus ‘is an important milestone in our mission to open up wealth and make investing as innovative, transparent and efficient as possible’.
‘Our commitment to delivering relevant, scalable, and cost-effective solutions for professional investors is unwavering,’ he said. ‘For the first time, through our FNZ structured investment team, we have delivered an outsourced manufacturing capability to investors.’