Tue, Apr 25, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

ESMA publishes research on the sale of complex products to retail financial consumers

Wednesday, July 03, 2013
Opalesque Industry Update - The European Securities and Markets Authority (ESMA) has published a research report on Retailisation in the EU, which examines the growth in the sale of complex financial products to retail financial consumers in the European Union (EU).

ESMA’s research focused on two specific types of complex products, alternative UCITS – where assets under management grew from €20bn to €85bn between 2007 and 2012 - and structured retail products – whose outstanding amounts totalled €770bn at the end of 2012. The research found that while their sale to retail financial consumers has increased, there is evidence to show that both products have produced relatively low returns.

The Report, comparing 600 alternative UCITS funds and 2750 structured products with capital protection sold across the EU to consumers between 2007 and 2012, found evidence that average returns for both products were relatively low at 3% for alternative UCITS and 2.5% for structured products.

Additionally, an analysis in the report of a sample of 76 structured products sold to retail investors found that structured products are sold, on average, with a significant issuance premium, estimated at around 4.6% of the issue price and up to 5.5% when the credit risk of the issuer is included.

ESMA Policy Responses
ESMA will use the reports’ findings in its policy work on improving investor protection by promoting better information disclosure at the point of sale about the total costs of investing in complex products and specific risks attached to each product.

press release
PD

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Hedge fund Ecofin says EDP bid for renewable energy unit 'egregiously low', Asia CIOs say "non" to Europe, Billionaire Mike Novogratz says he has 10% of his money in Bitcoin and Ether[more]

    Hedge fund Ecofin says EDP bid for renewable energy unit 'egregiously low' From Reuters.com: London hedge fund firm Ecofin said an offer from Portugal's largest company EDP to buy 22.47 percent of subsidiary EDP Renovaveis "significantly undervalues" the company, in a letter to EDPR's bo

  2. Alternative asset firm YieldStreet surpasses $100m of loans funded in less than 8 quarters[more]

    Komfie Manalo, Opalesque Asia: Alternative asset investment platform YieldStreet reported that it has surpassed $100m in loans funded in less than eight quarters from accredited investors and single family offices. YieldStreet was founded by Milind Mehere and Michael Weisz. In a

  3. Investing - Investor appetite for high-growth IPOs to be tested, Apollo boosts fund's stock allowance for 'diamonds in the rough', Hedge funds uncertain over outlook for Hargreaves Lansdown[more]

    Investor appetite for high-growth IPOs to be tested From FT.com: The US listings market is poised for a busy week with deals that will test investors' appetite for high-growth - but lossmaking - companies. Eight new listings are scheduled for this week, the most since October of 2016,

  4. Hedge funds holding Puerto Rico bonds are looking at a long battle[more]

    Komfie Manalo, Opalesque Asia: Hedge funds which bought Puerto Rico's distressed debt bonds are facing the prospect of a long road ahead to recover their investments as the Caribbean island is attempting to use a U.S. Congress-approved rule that allows it to exploit a bankruptcy-like proceedings

  5. Aris Wealth' quant indices fare well[more]

    Benedicte Gravrand, Opalesque Geneva: Last year, Geneva-based Aris Wealth Management launched indices sponsored by Societe Generale Corporate & Investment Banking. These indices replic