Six tranche products worth an estimated €49m were added to SRP’s Dutch database in February.

Issuance has increased year-on-year but the number of new products added were still a far cry from the 35 tranche products (€694) which were introduced eight years ago this month, in February 2007, when the Dutch market for structured products was at the height of its powers.

After Lehman, both from our side as from our customer base, there was no longer a demand for these products - Robert Schuckink Kool, Wijs & Van Oostveen

The new products, which did not have a subscription period but were introduced via the trading on the Euronext Amsterdam exchange, were issued via just three providers: BNP Paribas, ING and Kempen.

Back in February 2007, 17 different providers distributed structured products throughout the course of the month of which only BNP Paribas, ING, and, to a lesser extent, UBS are still active in the Netherlands. ABN Amro and Rabobank both closed their equity derivatives desk in recent years while foreign providers such as Barclays, Deutsche Bank and JPMorgan are no longer active in retail.

Amsterdam-based fund manager Wijs & Van Oostveen has also completely stopped distributing structured products. “After Lehman, both from our side as from our customer base, there was no longer a demand for these products,” said Robert Schuckink Kool, head of research at Wijs & Van Oostveen.

With the interest on savings accounts at an all-time low combined with the strong performance of the AEX, providers could be tempted to return although Wijs & Van Oostveen will not be one of them. “Not for us,” said Schuckink. “We are working on other initiatives but that’s more pure equities. We would much rather sell a product in which our clients are interested.”

There are investors who move from advice to execution only, but we also see investors moving from advice to discretionary portfolio management - Pieter Wind, AFM

Meanwhile, the number of Dutch investors switching to execution-only after a ban on commissions was implemented in the Netherlands has been limited, according to a poll from the Autoriteit Financiële Markten (AFM). “There are investors who move from advice to execution only, but we also see investors moving from advice to discretionary portfolio management,” said Pieter Wind, the project manager who implemented the AFM ban on rebates. “You do see some changes, but frankly not on the scale we expected.

The Dutch regulator also published a report on Contracts for Difference (CfDs) in February, which concluded that providers offer too easy access to CfDs; their marketing is based on an poorly targeted group of investors; and that the provision of information on the operation and risks of the product is insufficient.

We have seen that CfDs are only suitable for a very small group of sophisticated investors - Kris Marx, AFM

“We have seen that CfDs are only suitable for a very small group of sophisticated investors,” said Kris Marx, senior supervision officer at the AFM. “I do think there is a certain gambling aspect attached to CfDs. That’s an effect that CfDs have on investors, certainly when it comes to investing with a very short investment term. It somewhat resembles the effects that can be seen with online gambling.”

Erik Mauritz, head of exchange-traded solutions at BNP Paribas was elected as the new chairman of the Dutch structured investment products association (Nedsipa), succeeding Jan Erftemeijer (vice-president equities at Goldman Sachs), who, subject to internal approval, will remain a member of the board.

Image: Adobe Stock.

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