Set 142018
 

The European Securities and Markets Authority (ESMA) has carried out a study of the EU market in structured retail products, from an investor protection perspective.

The research breaks down the EU market geographically into national retail markets and found a high degree of heterogeneity in the types of product sold.

The report identified that although a wide array of different structured products are available to retail investors across the EU, each national market is concentrated around a small number of common types, namely capital protection products, yield enhancement products and participation products.

The analysis was carried out both at an EU-wide level and also specifically in the French, German and Italian retail markets, and suggests that the search for yield has been a common driver of several changes in the distribution of product types.

Structured products sold to retail investors in the EU are a significant vehicle for household savings. Certain features of the products – notably their complexity and the level and transparency of costs to investors – warrant a closer examination of the market from the perspective of investor protection.
Breaking down the EU market geographically into national retail markets reveals a very high degree of heterogeneity in the types of product sold, although among the vast array of different structured products available to retail investors each market is concentrated around a small number of common types.

Changes in typical product characteristics are not uniform across national markets. Analysis both at an EU-wide level and in the French, German and Italian retail markets suggests, however, that the search for yield has been a common driver of several changes observed in the distribution of product types.

ESMA: reports on trend risk and vulnerabilities (PDF)

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