Alice Yurke: Leveling the SP Playing Field

As growth in the European markets in particular continues, Alice Yurke on behalf of the Structured Products Association maps out the road ahead for Structured Products…

The last two years have seen unprecedented growth in the development and distribution of structured products in the United Kingdom, the United States and Europe.

Once exclusively the province of banks and securities firms marketing to institutional and ultra-high net worth individuals, the retail market for these products is developing globally at breakneck speed. A key to this rapid growth is continued marketplace innovation and positioning of structured products in both the retail and institutional arenas. However, the rewards of innovation and positioning are not without their legal and credit risks.

The most critical legal concerns in the development and distribution of structured products in the United States will continue to revolve around disclosure and suitability, particularly in the retail arena. These concerns heighten the need for diligence on the part of broker-dealers, in terms of both fully understanding their customers and highlighting the risks involved on a product-by-product basis. In-depth analysis and understanding of the products, followed by balanced explanation of the risks and rewards, will become increasingly more important as issuers offer complex products whose features may elusively appear to be only slightly different from those offered by a competitor.

For the full article, click here.