In this week’s roundup, we look at the latest developments at Solactive, Horizon Software, DLA Piper as well as regulatory updates in Europe.
Solactive has for the first time partnered with KB Securities for the listing of two exchange-traded notes (ETNs) in Korea on 15 December.
Japan's robust and revived economy and its traditionally strong position in robotics and consumption have become strong growth opportunities again, internationally - Timo Pfeiffer, Solactive
The ETNs – KB Japan Robotics TOP 10 ETN and KB Japan Consumer TOP 10 ETN – track the Solactive Japan Robotics & Machinery Index and the Solactive Japan Consumer Index, respectively.
The former index is derived from the Solactive GBS Japan All Cap with constituents involved in various businesses, including electronic equipment/instruments, industrial machinery, computer peripherals, electrical products, and electronic production equipment.
The Solactive Japan Consumer Index also tracks ten Japanese companies selected from eligible constituents in the Solactive GBS Japan All Cap Index and classified within consumer-oriented categories like entertainment, retail, home/care products, and food/beverages.
‘Japan's robust and revived economy and its traditionally strong position in robotics and consumption have become strong growth opportunities again, internationally,’ said Timo Pfeiffer (pictured), chief markets officer at Solactive.
Horizon supports KIS in listing its first structured products in HK
Horizon Software, provider of electronic trading solutions and algorithmic technology for the global capital markets, is behind Korea Investment & Securities Asia’s first derivative warrants market making, the French company revealed on 14 December.
The subsidiary of Korea Investment Securities (KIS), an active issuer of structured products in Korea, entered the space of structured products listed on the Hong Kong Exchange (HKEX) as the first Korean issuer last week.
As its longstanding ETF market maker customer, KIS Asia has been utilising hosted and managed services on Horizon’s H3 trading platform since March 2021.
‘We have full confidence that the utilization of the Horizon System will further augment our trading capabilities, enabling us to achieve greater success and expand our market presence in Hong Kong’s derivative warrants space,’ said Jangwon Seo (right), head of global derivatives at KIS Asia.
DLA Piper advises IPF on structured notes in Poland
UK law firm DLA Piper has advised International Personal Finance (IPF) on the issuance and settlement of PLN72m (€16.6m) senior unsecured floating rate notes under the issuer’s €1 billion medium-term note programme, most recently updated on 24 August.
The issuance, which marks ‘a strategic move’ for IPF, diversified the firm’s funding profile and unlocking new funding opportunities in the region, stated DLA Piper on 8 December.
The notes have been admitted to listing and trading on Euronext Dublin. In addition to clearing through Euroclear and Clearstream, the notes are also cleared through KDPW, the central securities depository of Poland.
Esma calls for clear product labelling
The European Securities and Markets Authority (Esma) has published a discussion paper on the digitalisation of retail investment services and related investor protection considerations on 14 December.
Among the products targeted are contracts for difference (CFDs), structured retail products or exchange traded products (ETPs). The firms offering these products may market them alongside ‘typical’ shares or bonds on the same webpage, listing them in the same tab or webpage, including presenting them as equal or similar alternatives, the EU financial regulator warns. Shares and CFDs on those shares may be labelled with the same or a similar code in the transaction system.
‘In such situations, it is very likely that the customer will make a mistake and buy the wrong financial instrument,’ stated the paper. ‘Furthermore, marketing communication may be structured in such a way that does not facilitate distinguishing whether the instrument marketed is a CFD, retail structured product or its underlying, because the advertisement or communication includes only (or mostly) information on shares or commodities that are the distributed product’s underlying’.
European regulators to amend sustainability disclosures
The three European Supervisory Authorities (Eba, Eiopa and Esma - ESAs) published their final report amending the draft Regulatory Technical Standards (RTS) to the Delegated Regulation supplementing the Sustainable Finance Disclosure Regulation (SFDR).
The ESAs propose adding new social indicators and streamlining the framework for the disclosure of principal adverse impacts of investment decisions on the environment and society. They also suggest new product disclosures regarding ‘greenhouse gas emissions reduction’ targets.
Additionally, the watchdogs propose further technical revisions to the SFDR Delegated Regulation, including the improvements to the disclosures on how sustainable investments ‘do no significant harm’ to the environment and society and the simplification of the pre-contractual and periodic disclosure templates for financial products.
Other technical adjustments concerning, among others, the treatment of derivatives, the calculation of sustainable investments, and provisions for financial products with underlying investment options.
Next, the European Commission will study the draft RTS and decide whether to endorse them within three months.