This week, we look at the latest developments across the globe, featuring Nomura’s return to the US registered note space and China’s snowball products update.
Nomura is back in the US public market with a clear objective - to extend the success of its equity derivatives (EQD) business in Asia Pacific into the US as the sole Asian issuer of structured notes registered with the Securities and Exchange Commission (SEC).
The US registered structured note market has become too big to ignore with its total traded notional exceeding US$100 billion in 2023
The Japanese bank aims at 5-7% market share in the SEC-registered note space in the next three years following nearly an 18-month preparation. The US registered structured note market has become too big to ignore with its total traded notional exceeding US$100 billion in 2023.
In the annuity market, Sammons Institutional Group (SIG) has added a custom index in partnership with Nasdaq and BNP Paribas to its registered index-linked annuity (Rila) shelf. The Nasdaq-100 Max 30 Index (NDXMAX30) is now exclusively available on the LiveWell Dynamic Annuity, which makes it the only Rila on the market offering a 30% volatility target index.
Meanwhile, a fraud lawsuit that went on for years has had its curtains down as Gregoire Tournant, former CIO of Allianz Global Investors US (AIG) pleads guilty to investment adviser fraud for a set of private funds - Structured Alpha Funds. He is scheduled to be sentenced on 16 October. Previously, the investment manager had paid a total of US$5.4m to victims and the US government.
Also in the US, Manulife Investment Management has listed two actively-managed ETFs on the Cboe Canada exchange - the Manulife Smart Enhanced Yield ETF (CYLD) and the Manulife Smart US Enhanced Yield ETF (UYLD) (and UYLD’s hedged, unhedged and USD units). The new listings aim to deliver exposure to dividend securities and covered call strategies to achieve multiple income streams.
In an exclusive interview with , Arnaud Jobert, global head of equities structuring and co-head of global strategic indices at J.P Morgan, discussed the role of QIS strategies in delivering performance to clients in risk off scenarios and diversification, especially from fixed income, and how zero days to expiration (0DTE) options have enabled risk mitigation techniques and defensive tilts on QIS strategies.
Europe
In the European market, Spectrum is seeking to capitalise on the rise in popularity of ETFs and its extended trading hours to enable brokers to facilitate intraday trading for their retail investors to expand their portfolios of available products.
In the latest equity derivatives (EQD) research, Société Générale (SG) has recommend buying put spreads on the Eurostoxx 50 and S&P 500 indices in response to elevated political uncertainty. On the same day, BofA Securities' global research division published new global equity volatility insights in which V2X future spread is a buy in view of the ongoing European elections.
On the regulatory side, the European Union (EU) Council has given up on its proposed ban on inducements and introduced a retail investment package that includes a proposal for a regulation amending the Priips regime and a new Omnibus directive amending several European regulations.
The monetary board of the Philippines Central Bank has approved the amendment of the regulations on derivatives transactions of banks, quasi-banks, and trust corporations regarding updating definitions of terms and notification requirements.
In the people moves section, Barclays appointed Alexander Altmann from Millennium Capital Management as managing director, global head of equities tactical strategies, a newly created role. Based in New York, and reports to Ronnie Wexler, global head of equities distribution.
In Asia, Arnaud Davoust, a former Bank of America managing director, has joined Natixis as managing director, head of equity derivatives sales and structuring for the region. Davoust has relocated to Hong Kong SAR from Singapore with reporting lines to Eric Elbaz, head of sales and structuring, Apac and to Guillaume Calvino, global head of equity structuring.
One of our weekly analysis unveiled that the consumer electronics and semiconductor sectors drove most of the sales of single stock-linked products in the first quarter of 2024 in the Asian market, according to SRP’s weekly spotlight analysis.
The saga around China snowball autocallable products remained in the spotlight but with a positive spin this time as the recent market rally has moved the products into alpha territory as investors have benefitted from the change of direction of the underlying indexes which have triggered positive payouts - nearly US$2.8 billion worth of China’s snowball derivatives have reached knock out levels year-to-date.
In South Korea, the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) have noted that they are still ‘reviewing measures to prevent recurrence [by] taking into account the results of the FSS inspection’ over the mis-selling of HSCEI-linked equity-linked securities (ELS).
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