Latest: UK autocalls prove their worth

Lowes Financial Management has released ‘A Guide to Autocalls – A 21-Year Evolution’ showing that the FTSE-linked capital at risk autocall is a mainstay in the UK sector, accounting for approximately 60% of autocall issuance and maturities to date.

Twenty years of maturities and historic performance show that autocalls have largely delivered as a reliable solution for investors - Ian Lowes

The guide demystifies autocalls and dispels common misconceptions, offering insights into their history and features, according to Ian Lowes (pictured), founder of StructuredProductReview and MD of Lowes. 

UK retail FTSE* linked capital at risk autocall maturities

_{*FTSE incorporates plans linked solely to the FTSE 100 or its very close, 99%+
correlated 'cousin' the FTSE CSDI, which tracks the same 100 stocks with the
same weightings but accounts for dividends differently.
Source: StructuredProductReview}

'Twenty years of maturities and historic performance show that autocalls have largely delivered as a reliable solution for investors,' said Lowes. 'The FCA’s Consumer Duty regulations are at the forefront of most advisers’ minds, and we know that Principle 12 states that ‘a firm must act to deliver good outcomes for retail customers. Autocalls have been helping advisers do so for 20 years now and are a proven, successful solution for investors.'

UK court dismisses Libyan SWF right to appeal in Goldman case

The UK Court of Appeal has rejected Libya's sovereign wealth fund's right to appeal against a 2016 judgement handed down by the High Court in the fund's US$1.2 billion case against Goldman Sachs relating to nine equity derivatives investments transacted in 2008 that turned out to be worthless.

The Libyan Investment Authority (LIA) which lost the case in 2016 had argued that it was too unsophisticated to understand what it was buying, and that Goldman Sachs had abused its position as a trusted adviser. But the trial judge dismissed these claims.

After the High Court ruling, the LIA subsequently sought permission to appeal, but the Court of Appeal refused the request.

The Libyan fund lost US$1.75bn in investments, managed by Goldman Sachs and Société Générale including US$300m in failed Lehman-backed structured products.

A spokesman for the LIA told Reuters the fund was 'considering its options'. Goldman Sachs declined to comment.

Korea’s financial watchdog warns covered call ETF investors

South Korea’s Financial Supervisory Service issued an alert to investors after the increasing amount of structured ETFs such as covered calls investments emerged in the market.

The distribution rate level used in the name of the covered call ETF is only a goal presented by the management company for each product and doesn't set a fixed return agreed upon in advance, the country's financial watchdog warned.

'Distributions are only compensation for giving up the increase in the underlying asset and do not enjoy additional profits other than the increase in the value of the underlying asset,' the FSS stated.

The regulator’s latest warning came after it found that covered call ETF's net assets surged to KRW3.7 trillion (US$2.7 billion) by the end of June, up 383% compared to the end of last December when KRW775 billion was recorded.

Covered call ETFs are investment products which involve a strategy where the sale of call options on shares already owned in exchange for a premium.

The FSS said that such product structure can protect against some losses by receiving option premiums through selling call options when the underlying asset falls but may ‘result in principal loss if the decline extends.’

‘If the underlying asset rises, the upward return  of the covered call ETF is limited,' the regulator stressed. 'If the underlying asset falls, there is no limit to the downside losses of the covered call ETF.’

The regulator said it will continue to thoroughly supervise the fund industry to create a ‘sound and transparent fund investment environment.’

‘We will do our best to prevent investors from misunderstanding the name and profit structure of the ETF and to ensure that investment risks are faithfully recorded,’ it added.

UBP acquires SG's International private banking operations in the UK and Switzerland

Union Bancaire Privée, UBP SA (UBP) and Société Générale have entered into two exclusive agreements where UBP will acquire the French bank's Swiss private banking activities (Société Générale Private Banking Suisse) as well as its UK and Channel Islands wealth management arm (SG Kleinwort Hambros).

Both transactions are expected to be completed by the end of the first quarter of 2025. 

This acquisition will further increase UBP’s footprint in Switzerland, and will accelerate its expansion in the UK, where UBP has been developing its activities for nearly three decades, in both wealth and asset management.

With this acquisition, UBP will increase its assets under management, which stood at CHF150.8 billion (US$173.1 billion) as of 30 June 2024, by more than CHF25 billion.

The onboarding of SG's teams will also contribute to broadening UBP’s presence in selected jurisdictions, once the requisite regulatory licences have been granted, including in the Channel Islands and Gibraltar, said UBP’s CEO, Guy de Picciotto.

BNP Paribas enhances its offering in Thailand

Following BNP Paribas Securities' (Thailand) launch of its onshore wealth management presence in Thailand, BNP Paribas Wealth Management has announced its intention to increase its local coverage and client asset base.

The French bank plans to increase the quantity of relationship managers handling Thai clients' assets over the course of the next three years.

'Thailand, as the second-largest economy in Southeast Asia, is a country filled with dynamic entrepreneurs,' said Arnaud Tellier, Asia CEO of BNP Paribas Wealth Management.

“BNP Paribas has been operating in Thailand for 45 years, currently serving more than 500 corporates and institutions. Our wealth management team is leveraging this established presence and collaborate with our corporate and institutional bank to offer tailored and innovative solutions to even better address the increasingly sophisticated business and private wealth needs."

BNP Paribas will serve its Thai clients via its platform, which is situated in Singapore. The platform offers traditional asset management, wealth planning, advisory services, brokerage services, and access to investment possibilities in a variety of asset classes, including equities, fixed income, hedge funds and structured products.

Vincent Lecomte, CEO of BNP Paribas Wealth Management, said: 'Capturing the significant opportunities presented by Asia’s rapidly growing wealth is a core strategic priority for our wealth management business'.

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