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Derivatives

Gov-Backed Retail Products To Boost Structured Mart

Financial Services Authority and U.K. government guidelines announced earlier this month will likely boost the structured product market, according to bankers.

Financial Services Authority and U.K. government guidelines announced earlier this month will likely boost the structured product market, according to bankers. The new savings products are designed as simple investments for low-income investors and are expected to hit the market in April. Previous consultation papers have clarified that products are permitted to use derivatives for efficient portfolio management.

Barclays Capital is watching the area closely, according to Brett Tejpaul, head of U.K. marketing. "There will be opportunities to create tailor-made assets," said Tejpaul, although he added it may take time to raise significant assets and this could present challenges to asset managers. Ian Jefferies, head of marketing at U.K. financial services company Friends Provident, said the group will carry out financial analysis and market research on a range of savings products, including structured products.

Vicki Kennedy, a government spokeswoman, said it will publish draft regulations on stakeholder pensions, which may also provide opportunities for structured products, but declined to give a timeframe.

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