Finra to issue investor alert on reverse convertibles
The US Financial Industry Regulatory Authority (Finra) is set to issue an investor alert on reverse convertibles, said one if its representatives at a New York conference this week. The body has concerns over both disclosure and suitability issues, said Richard Vagnoni, an economic analyst with Finra, speaking at the US Structured Products Association conference.
The short-term structures pay a monthly coupon and return investor principal in the underlying stock if it has fallen by a certain amount. They have been the dominant product in the US market since its inception, but have been heavily punished by falling equity markets with the majority returning principal in stock over recent months.
Finra is treading carefully given the circumstances and what has
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