The major news in the past week has been Credit Suisse’s acquisition by fellow Swiss bank UBS and all the ramifications the deal entails.
Harrold Prins has started a new position as head of commercial relationship at Euronext, focusing on the business development of the structured products market across Europe. He remains based in Amsterdam. Prins has been at Euronext for almost 23 years, most recently as commercial manager index with responsibility for the commercial development of the various Euronext indices. Prior to that he fulfilled various marketing and sales manager roles, also at Euronext Indices, since December 2000.
The Central Bank of Ireland (CBI) has released new supervisory guidance to investment firms to clarify aspects of the relevant Mifid 2 investor protection requirements and the expectations set out by the regulator in the SRP Letter on Mifid 2 structured retail products last year.
These relate to how the warnings on use of a decrement index should appear, and the presentation of back-testing.
The use of decrement indices – ‘where a fixed dividend is periodically deducted from the underlying index and which can act as a 'downward drag' on performance where it is higher than the actual dividend paid, and in particular where the index falls below its initial level - was identified as an area of particular complexity by the regulator in 2022.
The major news this past week was the acquisition of Credit Suisse by UBS, reminiscent of J.P. Morgan’s takeover of Bear Stearns in 2008 for a discounted price of US$240m. The troubled US bank had once been valued at US$140 billion. This time UBS is paying US$3 billion when Credit Suisse was valued at US$8 billion (17 March) before the deal was brokered.
Credit Suisse will continue to operate ‘in the ordinary course of business’ and collaborate with UBS as the restructuring and integration goes ahead. There are over 8,500 live products worth an estimated US$25 billion issued on Credit Suisse’s paper across markets – some will transfer overtime to UBS. Issuance will continue with a transfer over time of the issuer to UBS, and the existing product range will be maintained and updated by Credit Suisse until further notice.
Contineo has expanded its partnership with BNP Paribas Wealth Management to enhance its platform and respond to demand from European investors and include Europe’s most popular payoffs on its platform for multi-issuer pricing, request for pre-trade regulatory documents and order placement. The Singapore-based platform launched a strategic partnership with BNP Paribas Wealth Management to connect with multiple issuers in Asia and expand to Europe to start servicing clients in the region. Contineo is also seeking to leverage its newly established development hub in Europe to accelerate its expansion.
French wealth tech provider Harvest has acquired Feefty a fintech specialised in ‘customised structured products and related tools’. The closing will take place in April 2023. Harvest is seeking to leverage the Feefty structured products platform to retain its position as ‘a central and key player in the French market for wealth management, customer relationship management, investment strategies, data, digital distribution platforms and training’.
The products and management tools of the two entities will be connected to enable the construction, subscription, listing and performance monitoring of products.
Morgan Stanley issued Ethna Défensif Mars 2023 in France. The six-year product is distributed via Axa and offers access to Ethna-Aktiv, a multi-asset fund that is actively managed on a flexible basis, independent of benchmarks. The fund consists of a bond portfolio invested in corporate and sovereign bonds; it also includes an equity portfolio accounting for up to 49% of the total assets, which may comprise liquid index derivatives, as well as individual equities. Currencies and up to 20% gold and/or other commodities may be used to further diversify the portfolio.