Five trade associations recently released a draft set of principles governing structured products for retail investors. And it's about time.
The non-binding principles focus on the relationship between product providers and distributors. To be honest there is nothing particularly groundbreaking and, to my mind at least, the principles simply detail existing best practice. Nevertheless it's encouraging to see the associations finally take the market seriously.
The associations (Isda, the European Securitisation Forum, the International Capital Market Association, the London Investment Bankers Association and the Securities Industry and Financial Markets Association) have invited comments on the proposals before May 30.
If you have any thoughts you would like to share then do let me know.
Late last year the Swiss Exchange and Deutsche Börse told us that they would be aggregating their structured products trading in a joint exchange dubbed Alex. Sadly, due to some legal wranglings concerning the use of that name, the exchange was forced to call itself SWX Quotematch AG. But naming issues asaide the joint venture appears to already be enjoying considerable success.
In the first three months of 2007, a total of CHF 20.6 billion worth of structured products changed hands in the Swiss market of SWX Quotematch. And that corresponds to a 58.4 % increase over the comparable prior-year quarter and also represents the second-strongest quarter in Swiss securities exchange history. A significant increase was also recorded in total trading volume, with 674,104 trades executed in the first quarter – a 27.8 % gain compared to the same period in 2006.
It's interesting to note how SWX is eager to point out that structured products were largely responsible for "the second-strongest quarter in Swiss securities exchange history." Will we see a rush to list products at other exchanges as a result? Any thoughts let me know...
