25.11.2014

Successive improvement in cost transparency for structured products

The board and the members of the SSPA have decided to improve the cost transparency of structured products still further. From 1 March 2015 onwards, all issuers of structured products will state product distribution fees. The corresponding disclosure obligation has been set out in the new “Guidelines on the Provision of Information to Investors Concerning Structured Products” issued by the SSPA together with the Swiss Bankers Association (SBA). Beginning March 1, 2015, distribution fees as a percentage of the issue price will be stated in all simplified prospectuses. In this conjunction the SSPA will be leaving it to the issuers to provide further cost transparency. Some SSPA members already provide a breakdown of the cost of their products.

Distribution fees include fees structured product issuers include in the issue price, such as compensation paid to distribution partners. The disclosure means investors know precisely what monetary incentives distributors receive for product sales, providing them with an even better understanding of the products and issuers.

In a second phase, the SSPA is planning to introduce a breakdown of the costs in close collaboration with the European umbrella organisation eusipa. European reporting standards are to be drawn up on the basis of today’s rates and experience. This will make the structured products industry one of the most transparent in the financial markets.

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