Latest: UK watchdog to halve number of investors in ‘high risk’ products by 2025

The UK watchdog has published a three-year strategy to strengthen consumer protections, with a particular focus on what it sees as high-risk investments.

According to the regulator, six per cent of adults invested in high-risk investments during the pandemic, while 45% of self-directed investors said they did not realise the risks.

The regulator is aiming for a 50% reduction in the number of consumers who indicate a ‘low risk tolerance or demonstrate the characteristics of vulnerability’ putting money into high-risk investments by 2025.

Sarah Pritchard (pictured), executive director of markets at the FCA, said that over the next three years, the regulator will ‘strengthen the financial promotions regime in three areas, including its classification of high-risk investments, further segmenting the high-risk market and strengthening the requirements on firms when they approve financial promotions’.

The new plan follows a call for input (CFI) on consumer investments that the FCA published in April, seeking views on whether more types of investments should be subject to marketing restrictions and if tougher rules on financial promotions are needed.

Structured products and cryptocurrencies are listed among high-risk investments as well as contracts for difference (CfD), foreign exchange products, binary options and mini-bonds.

New leveraged trackers on top 10 French stocks launched

Exchange traded products (ETP) provider GraniteShares has expanded its European offering with the launch of 20 collateralised trackers on Euronext Paris.

For its arrival in France, the firm is adding to its product range 20 ETPs offering long (+3x) and short (-3x) daily leveraged exposures on 10 of the largest French stocks including Airbus, AXA, BNP, Danone, L'Oréal, LVMH, Safran, Sanofi, Schneider Electric, STMicroelectronics and TotalEnergies.

The products are designed to amplify the daily return of an underlying stock, allowing sophisticated investors to express their bullish or bearish convictions on a specific company.

‘The interest of the French market is to be composed of companies operating in a range of sectors subject to diverse macroeconomic drivers,’ said Benoit Autier, co-founder and COO of GraniteShares. ‘Our long and short leveraged ETPs are particularly well suited to this type of environment.’

FIG partners with Simon Markets to enter the fintech space

Financial Independence Group (FIG), a US provider of financial services and insurance products has launched Quinci, a digital platform powered by leading multi-dealer Simon Markets, to become an ‘all-in-one solution for investors’.

Quinci will provide financial professionals with product analytics, and business management in a collaboration with Simon Markets' digital platform for wealth management professionals.

The new platform supports product lines across fixed insurance, registered insurance, and structured investments with constant data exchange and has been divided into five segments to match adviser needs.

These segments include educational tools, financial planning features, a centralised marketplace, e-applications, and a lifecycle management tool to ensure that advisers can manage their entire portfolios from initial submission to maturity with real-time status updates and two-way communications. 

Simon and FIG entered a partnership in June.

Morningstar acquires Moorgate Benchmarks to fuel self-indexing

Morningstar has completed the acquisition of Moorgate Benchmarks, a London-based provider of index design, calculation, and administration. ETFS Capital provided seed funding to Moorgate Benchmarks in 2019 and had been its sole external investor. With this transaction, Moorgate Benchmarks becomes a wholly owned subsidiary of Morningstar. Financial terms were not disclosed.

Morningstar is seeking to leverage Moorgate Benchmarks’ advanced index design, calculation and administration technology alongside its data and research to deliver ‘more customised and personalised indices, delivered faster’.

Moorgate Benchmarks’ 20 employees, based in the UK and Germany, will immediately become part of Morningstar Indexes.

In addition to his role as Moorgate Benchmarks CEO, Tobias Sproehnle will become head of Morningstar Indexes in Europe, reporting to Ron Bundy, president of Morningstar Indexes. The additional members of the Moorgate Benchmarks executive team – Gareth Parker and Mark Pralle, will join the Morningstar Indexes leadership team and report to Sproehnle.

Lyxor dispatches ‘corporate green bond’ tracker

Lyxor Asset Management has launched the Lyxor Corporate Green Bond (DR) Ucits ETF which replicates the performance of the Solactive EUR USD IG Corporate Green Bond TR Index.

The ETF has been designed to enables investors to align their corporate bond portfolio with net-zero goals by adding corporate bonds to their portfolio that contribute to the transition to a low-carbon economy.

The underlying index created by Solactive includes companies that use the green bond market to reach their climate targets.

The index is a rules-based, market value-weighted index engineered to mirror the investment grade corporate green bond market in EUR and USD. The index is calculated as a total return index denominated in EUR and also features an ESG screening filtering issuers for controversial weapons; civilian firearms; adult entertainment; alcohol; gambling; genetic engineering; stem cell; tobacco, thermal coal, UN sanctions, and UNGC.

Compared to 2019, the green bonds market increased by US$290 billion in 2020, which represents a nine percent increase in new issuances, according to a report by the Climate Bonds Initiative.