BNPP’s two MDs within the global equities division had role exchanges; VDK Bank made a comeback in Belgium; and Singapore’s DBS sets to offer structured notes tracking the price of Bitcoin and Ethereum.

Here's a highlight of structured product industry news from last week.

Gabriel Nguyen and Nicolas Georges, two managing directors, have assumed new roles within the global equities division as part of global markets at BNP Paribas, according to an internal memo seen by SRP.

The move is part of the French bank’s effort to ‘foster a culture of growth and development, providing the opportunity to work in different locations to expand skills, experience, and perspectives’

Nguyen has relocated to Paris as head of private banks & distributors for Northern & Eastern Europe sales, reporting to Terence Darrigade, head of Europe, the Middle East, and Africa distribution sales. Georges has been appointed as sales head of PB&D for the Americas (ex-Brazil). He has moved to New York from Paris with a reporting line to Nathalie Texier-Guillot, head of institutional sales, equity derivatives, for the region.

The move is part of the French bank’s effort to ‘foster a culture of growth and development, providing the opportunity to work in different locations to expand skills, experience, and perspectives’, the memo said.

The US Securities and Exchange Commission's actions last week brought the Street’s attention as the regulator charged the registered broker-dealer First Horizon Advisors for 'failing to maintain and enforce policies and procedures reasonably designed to achieve compliance with Regulation Best Interest'.

Meanwhile, the SEC also ordered an Arizona advisor to pay US$1.6 million in disgorgement and penalties for mis-selling structured notes after proceedings against the firm and its owner, Dharmesh Virendra Vora and his firm, Vora Wealth Management. They have also been barred from the industry for at least three years.

Recapping SRP Americas 2024’s conference held in New Orleans earlier this month, panellists discussed portfolio allocation and capital protection, how buy-sides drive the innovation of technology and platforms, and the growing popularity of defined outcome ETFs.

From an underlying perspective and looking at the selection process and how exposure is assessed in relation to the properties of stocks and indices, as well as more complex underlyings, Ed Condon, senior managing partner at Structured Insights, pointed at the "small handful of indices dominating the total issuance in the United States".

“Essentially, advisors are voting with their investment dollars because they know they can successfully place with their clients,” Condon said during the Product Lab discussion. “It would be interesting to see what issuers would like advisors to be buying versus what they're actually purchasing.”

New developments

Looking at the Emea development, VDK Bank, formerly VDK Spaarbank, has made a distribution comeback since 2017 by collaborating with Natixis for the launch of two green debt securities in Belgium: Natixis (FR) Fixed to Floating CMS Linked Coupon Green Note 2028 and Natixis (FR) Fixed to Floating CMS Linked Coupon Green Note 2029.

“We started offering structured products again in the spring,” Thomas De Nil, head of product management investment and ALM portfolio at VDK Bank, told SRP. “Since then, we have been back in the market because market conditions – and especially interest rates, which have a major influence on the manufacturing of this type of structure – once again allowed us to offer diversifying products to customers.”

The European Securities and Markets Authority (Esma) has sounded the alarm on the dangers of zero-days-to-expiry options exchange-traded products (ETPs) after they have risen to popularity with retail investors in the US. 'Despite the current low but growing volume of traded contracts, there are inherent risks associated with zero-day options, in addition to potential losses for retail investors,' said the regulator.

In Asia, the market is eyeing DBS’s upcoming launch of over-the-counter cryptocurrency options trading and structured notes, targeting eligible institutional investors and accredited wealth clients within DBS Private Bank and DBS Treasures Private Client in Singapore, starting from the fourth quarter. The debut means the Singaporean banking giant is set to become the first Asian-headquartered bank to offer financial products whose value is linked to Bitcoin and Ethereum prices, the bank said.

“DBS is offering structured notes, including cryptocurrency spot-linked notes and cryptocurrency ETF-linked notes," Jacky Tai, group head of trading and structuring, global financial markets at DBS, told SRP.

Meanwhile in Hong Kong SAR, the volume of structured products traded in 2023  rebounded three percent year-on-year to HK$1.98 trillion (US$254 billion) after the disappointing performance in 2022, according to an annual survey on non-exchange traded products released last Friday by the Securities and Futures Commission and the Hong Kong Monetary Authority. Around 61% of structured product sales come from equity-linked products, the survey found.

Image credit: Hand Robot/AdobeStock.

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