Editor's letter

Offering a 90-year old woman a 10-year structured product is obviously irresponsible, wrong and should be condemned by anyone involved in finance. But while everyone responds in the same way - offering a mixture of shock and outrage - there always appears to be someone willing to make this kind of sale. The latest example of a practice that has always been guaranteed to rile the regulator has taken place in Italy.

Endemic wrongdoing in Italy has for many years elicited extreme responses from regulators, as they react yet again to the dismal record of misselling and the now beleaguered (and poor) Italian retail investor. It is no consolation that the brash selling practices of all financial instruments - not just structured products - have damaged the wealth, or worse, the retirement income, of Italy's investor community.

Against that backdrop, it is easy to see why Commissione Nazionale per le Societa e la Borsa (Consob), the Italian financial market regulator, has come up with a Mifid implementation draft document that has irked almost the entire community of structured products bankers in Europe. Banks and trade associations alike are crying foul over the degree of disclosure requirements that Consob is suggesting are quite reasonable in its Level 3 - Regulations for Intermediaries consultation document.

The conclusion to this new Italian derivatives debate/scandal/horror - however you want to coin it - will be reached in September, when the regulator expects to produce a final legal document. All of that may run smoothly, unless the European Commission decides that it must take a hand in the writing of an implementation process that all other countries will have to follow in some way.

While the furore rages in Italy, seek some light-hearted relief from the cut and thrust by reading the newest addition to the magazine - Lookback, a column that includes the highs, lows, oddities and notes of interest that we have uncovered during the past month.

Richard Jory

[e-mail]

[phone].