New hires join European issuers while Asia Pacific authorities call for a need to improve product design and distribution practices.
Deutsche Bank has made a recent senior hire within its investment bank in Switzerland. As of December 1, Michael Vonmoos will join the bank in Zurich as managing director and head of structured solutions sales Switzerland. In this role, Vonmoos will report to Leonardo Doser, who has led the bank’s markets distribution in Switzerland for almost three years.
ASIC is disappointed that some high-risk retail product issuers have changed little in response to their design and distribution obligations - Karen Chester
Vonmoos has more than 16 years of experience in derivatives and structured products, most recently as head of structured products & institutional solutions sales Switzerland at Credit Suisse. He also currently serves as board member of the Swiss Structured Products Association.
Jakub Sarna has been appointed managing director of the financial markets division at BNP Paribas Poland. Sarna takes up his position in addition to his role of director financial markets sales at the bank.
In his new role, Sarna will be responsible for the overall global markets business in Central and Eastern Europe (CEE) - equity derivatives sales, corporate sales, institutional sales, trading, global markets business development and financial markets.
Sarba began his career at BNP Paribas Poland in 2018 as head of corporate sales global markets for CEE. Prior to that he spent 13 years at Deutsche Bank, including as the head of corporate treasury sales, DCM financing & solution group. Before that he was a derivatives dealer at Citi and an analyst at the Ministry of Finance in Poland.
In Japan, Chiba Bank has announced that chairman Hidetoshi Sakuma will resign at the end of March next year. This comes two months after the regional bank, its subsidiary Chibagin Securities and Musashino Bank received a business improvement order issued by the Kanto Local Finance Bureau for inappropriate sales of structured bonds.
Nine existing and retired executive officers will face a 20%-50% pay cut or pay return requests for three to six months as the bank ‘[takes] seriously the responsibilities of the relevant executive officers who have come face problems in protecting investors with regard to the financial instruments intermediary businesses related to the solicitation and sales of structured bonds,’ stated the bank.
Chiba Bank’s latest move followed the news earlier this summer that the Securities and Exchange Surveillance Commission (SESC) under Japan’s Financial Services Agency was urging regulators to punish Chibagin Securities. The SESC said the Chiba-based investment banking firm sold structured bonds that did not match investors’ financial knowledge, transaction experience, asset status and investment purposes ‘over a long period of time’.
The Australian Securities & Investments Commission (ASIC) is taking aim at the broad distribution of over-the-counter (OTC) derivatives and other high-risk retail products to have issuers meet design and distribution obligations (DDO), according to its announcement along with a report issued on 6 September.
Following a recent review, the Australian regulator found issuers have ‘significant room for improvement’ to fulfill their obligations, including to ‘address their over-reliance on client questionnaires as a primary distribution filter.’
‘ASIC is disappointed that some high-risk retail product issuers have changed little in response to their design and distribution obligations,’ Karen Chester, ASIC’s deputy chair, said in the statement. ‘These are high risk products, which mean a range of controls are likely needed to ensure they get to the right consumers in their ‘niche’ target markets. We know the stakes are high for resulting harms if they end up with consumers outside of their stated target markets.’
Solactive has increased its visibility as an active provider in the strategy and custom index space following a partnership with Goldman Sachs in mid-2020 to replace Motif Capital as the calculating agent and administrator for three families of indices - National Defense, Aging of America and Artificial Intelligence.
Since then, the German index provider has established itself as a third-party calculating agent for other custom and quantitative investment strategies (QIS) sold in the structured products market globally as well as the US FIA market.
“We do already more QIS than thematic indices but very often you don't see that because we are just the calculating agent for some of the very large banks,” said Solactive’s chief markets officer Timo Pfeiffer. “They launch a quant strategy, and they need to trade a swap with a pension fund, and they need somebody to calculate the index which Solactive does on the back end. These QIS are often institutional strategies.”
When it comes to the strategy and factors space, the index provider has seen a comeback of value since the beginning of 2023, “mostly minimum volatility factor strategies, but compared to thematics and ESG it is still relatively small”.
The final part of SRP’s Index report, covering custom and strategic indices, will be published during the SRP Americas 2023 conference, held in Chicago on 26 and 27 September.
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