Deutsche Bank in the U.S. is preparing to offer a range of investment products to retail investors, after getting the green light from the Securities and Exchange Commission. The firm, which has previously offered derivatives-based investments on a private-placement basis or through a third party, has registered with the SEC two prospectuses for equity-linked notes since getting the go-ahead for a shelf registration in October.
Although the primary advantage of a shelf registration is a cut in the paperwork required for firms to raise funds, it also speeds up the process of issuing structured investments and allows access to a greater range of investors. Calls to Deutsche Bank officials were referred to spokesman Ted Meyer, who declined to comment on the scale of its planned issuance through the shelf registration. He noted, however, the firm will issue across the full range of asset classes including foreign exchange, commodities, interest rates, equities and combinations of those securities.
U.S. structured note watchers said it is hard to estimate the difference the shelf registration will make to the bottom line of Deutsche Bank's derivatives business. One rival said, "It's very significant." The German firm, while making solid ground in some U.S. derivatives business, such as hedge fund sales, has not made its mark for structured investments the same way as it has in Europe, he added. In the retail market it has been overtaken by European rivals such as Barclays Capital and ABN AMRO,which have had shelf registrations in place for some time, and U.S. firms that are increasingly using their shelf registrations to issue structured notes.
Deutsche Bank, however, is not the last to the party. At European firms including BNP Paribas and SG Corporate & Investment Banking, the structured notes business is a powerhouse of the investment bank, yet these firms do not have a shelf registration. Rivals attributed this in part to the requirement to reconcile accounts to U.S. Generally Accepted Accounting Practices and comply with Sarbanes-Oxley.
