29.04.2015

Increased transparency by disclosing distribution fees

The Swiss Structured Products Association has set itself the target of improving the transparency of structured products. From 1 March 2015, issuers will proactively join forces by making the significant contribution of rejecting product distribution fees. These are given as a percentage of the issue price and report on the simplified prospectus of the respective products.

The SSPA is committed to the dissemination of information, clarity and transparency of structured products. This includes making costs for investors more transparent. So as of the beginning of March, all issuers will reject distributor fees. These cover all of the fees calculated by the issuer for structured product issuance, including remuneration to partners. To enhance comparability, they will be listed as a percentage of the nominal amount per year, with a holding period of 10 years assumed for products of unlimited duration. The disclosure agreement for products issued from 1 March was adopted by the SSPA together with the Swiss Bankers Association (SBA) in the new “Guidelines on informing investors about structured products”, and has been recognized by the Swiss Financial Market Supervisory Authority FINMA as a selfregulatory standard.

At the same time the SSPA is participating in the European Federation EUSIPA on the European debate on cost transparency. The aim is to define a code approved by the regulatory investor authorities, which is friendly and understandable and can be applied Europe-wide. The introduction of a recognized Europe-wide code for the structured products, will make the industry one of the most transparent areas of the financial markets.

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