VIEWS ROUND-UP
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To be in, or not to be in
The UK Structured Products Association was launched to muted
applause as some of the biggest market players declined to get
involved. Is the Association a good idea; a good idea but poorly
executed; or, is any criticism unfair at this early stage?
MARC CHAMBERLAIN,
EXECUTIVE DIRECTOR,
UK STRUCTURED
PRODUCT DISTRIBUTION,
MORGAN STANLEY
Anything you try to do has
to start somewhere so to
get something out there
instead of simply talking
about it meant we drew a
line in the sand because
we wanted to start the edu-
cation process of the
investment community.
The UK Structured
Products Association is
open to everyone as, like
any association, it is open
to people wanting to come
on board at any time in the
future. There has already
been a number of people
looking to join in the New
Year and if that necessitates
changes in our structure
then so be it.
As well as half a dozen
companies interested in
joining, there are a number
of bodies who are interested
in setting up committees
to advise the membership
on various aspects of
structured products.
The Association has
been a while coming and
US STRUCTURED PROD ASSOC
The US set up is quite different. It is very much about members for
members. They run conferences among the members. It is about
individuals not firms. It doesn’t have a public facing role and it
doesn’t do the education thing that the UK organisation is trying to
do. Also, the UK needs something set up by UK manufacturers or
distributors because they know the market here. They know about
regulation and distribution in the UK. The UK Association was set up
with the narrowest of remits and if it changes it will be for the better
of the industry. The good thing is the two associations are in dialogue
with each other. Marc Chamberlain says: “There is room for both
Associations. The point is if you had asked me two months ago I’d
have said I’d rather have two organisations than none.”
Source: A spokesman for the UK Structured Products Association
SUMMARY
The UK Structured Products Association was established mid-
November this year, to muted applause. Its key objective is “to
inform and educate the investment community through independent
commentary on the broad range of issues involving structured
products and the role of structured products in an appropriately
diversified investment portfolio”.
Members include: Citi; Credit Suisse; Legal & General; Morgan
Stanley; Prudential; Royal Bank of Scotland; Santander; Skandia.
A subordinate committee includes: Gilliat; Jubilee Financial Products;
Meteor; Walker Crips Structured Investments
Companies with a watching brief include: HSBC; Barclays; Investec;
Blue Sky Asset Management
now we are up and running
we have to roll our
sleeves up and start as we
said we would. Our remit,
at least in the initial stages,
is very narrow in that we
will provide unbiased
opinion and promote education
on structured products.
It will be down to us
to put statistics out there,
about products and how
they have fared, and doing
it through the Association
and not, in my case,
Morgan Stanley.
The idea is not about
individuals or firms; it is
about what we all do and
about education in general.
To my mind, it is for the
promotion of the industry.
We are in it to make sure
there is more knowledge
GRAHAM DEVILE,
MANAGING DIRECTOR,
METEOR ASSET
MANAGEMENT
The higher level banks and
the like kicked off the
Association and they then
allowed us to become committee
members. It is very
much in its infancy, with
the founding companies
[see box left] banging the
drum and paying the costs,
though they do want as
many other people linked
in as possible.
Are we there? Do we
CHRIS TAYLOR, CHIEF
EXECUTIVE, BLUE SKY
ASSET MANAGEMENT
We are wholly supportive
of the UK structured products
industry having an
association and we welcome
the progress made.
Before we can commit
our involvement, however,
we need to see more
formal and full detail for
the Association, which has
not been available to us at
this stage.
We envisage participating
and contributing, if it
is on a fully inclusive
industry association basis.
out there, that people
understand how structured
products work, understand
they are here to stay, and
to promote them. It is new
to all of us and when anything
is new we have to
put the time in and work
want to be involved? Are
we supportive? Yes, as long
as the story is right, absolutely.
As far as I’m concerned
I don’t care who is
fronting it, who is banging
the drum, who the head
honcho is. If the message is
right and the story is right
then we’re happy to be
associated with it.
If it starts to become
company or distributionspecific,
we might have
issues with it but all the
time it is an education process
then it does not matter
whether you are one of the
founder members, or on
the main board, or a committee
member. Surely you
should just be happy the
message is getting across.
The aim is to improve
market knowledge which
has to be in everyone’s
interest. The problem is – as
with everything – if you
end up with 15 people
We feel the opportunity
is live and available for a
genuine industry association
of manufacturing distribution
and advice, without
division. The optimal
association will also engage
all industry participants
and interested parties,
including research firms,
index providers, legal
firms, compliance specialists
etc, to achieve a fully
effective and cohesive
association to represent the
industry and advance it.
The US Structured
Products Association has
established a good industry
model that is notably inclusive
and comprehensively
representative of all interested
parties. It could be
that two associations might
serve the UK well, if progressed
in a joined-up and
complementary fashion,
presenting an opportunity
for a cross-Atlantic
collaboration, developing
best industry practice.
hard. At the same time,
when you put something
out there, things start to
happen that you may not
have envisaged such as the
number of people wanting
to join, some from other
areas (IFAs, regulators etc).
trying to agree something it
will never happen. To get it
off the ground, you have to
stick to a small number to
start with, and those of a
similar mind can join while
those that are not can distance
themselves from it.
The Association seems
to be doing OK at the
moment and I’m behind the
concept as long as it stays
on message and is not a
provider push. All the time
it is an industry push and
nobody is banging their
own drum over the sector’s
drum it has to be good. If
someone wants us to be at
the forefront I’m happy to
be there; if someone wants
us to be in the background
then that’s fine because if
someone asks us: “Are we
involved” we can genuinely
say: “Yes”.
As long as it is doing
what it is meant to do is all
that matters
12 PORTFOLIO ADVISER [www.portfolio-adviser.com] JANUARY 2010
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