The Royal Bank of Scotland plans to launch its electronic structured products platform in the U.S. and to expand its structured products sales and e-commerce team in the country.
The firm’s Market Direct platform, which is available in Europe and the Asia Pacific, is slated for launch in the U.S. in the third quarter of this year. It is an electronic tool that allows users to obtain prices, tailor and trade structured products on RBS’ primary and secondary market. Users can also, for example, track their quotes and trades in a so-called blotter window.
“Since the financial crisis, regulations have tightened on derivatives globally and there is a trend to improve transparency. MarketDirect industrializes the traditional phone conversation to an electronic platform and offers a scalable process for structured products distribution,” said Beat von Gunten, global head of sales, equities and structured retail in London.
The firm is currently in discussions with U.S. private banks to sign up for the platform, with an aim of having two to three major U.S. banks on board by the end of the year. Michael Nelskyla, head of structured retail distribution for the Americas in Stamford, Conn., noted that the platform would benefit private banks that source the majority of their products from counterparties separate from their internal capital markets division.
“The things they do want is rapid pricing, and also they want the information in a cohesive format,” he said. “So, for example, if you are dealing with eight issuers, all those different issuers and timing for pricing and different formats...what they want is for issuers to provide pricings, deliver secondary markets and also to deliver ideas to then be put in a platform system.”
Nelskyla has begun building up the firm’s U.S. structured products sales force in preparation for launch and is planning on recruiting a dedicated person for the electronic platform. The firm currently has 11 people in the team in front office functions across trading, structuring and sales.
On April 11, the firm hired John Martin from JPMorgan as a director focusing on third-party distribution of structured retail products. Nelskyla aims to expand the team with three to four additional salesmen by the end of the year.
The move by RBS comes as other European competitors are also planning to expand their structured product platforms in the U.S. UBS, for example, plans to roll out both its Equity Investor Marketplace and FX Investor Marketplace products to private banks in the U.S. in a few months (DW, 2/4), while BNP Paribas is in plans to roll out its Click ‘n Trade platform globally later this year.