Editor's letter


Whether you like it or not, market participants now have a series of 10 principles designed to govern how retail structured products are created and sold. The guidance, issued by five trade associations with a special interest in the development of this market, tells us several things: manufacturers and distributors must co-operate; they must record the details of their relationship; and they must ensure that they expend all of their energies on meeting the interests of end-users - the buyers of retail structured products.

The principles are the first to be devised under a global remit, and were initially greeted with a mixture of approbation and lack of interest. While some market professionals have been appreciative, it seems that some were unaware or unconcerned about the result of the years of effort it has taken to arrive at a concluding statement of international market practice.

Thankfully, the inclusive approach taken by the trade bodies should ensure that the principles will be broadly recognised throughout the industry, but there is no doubt that trying to please almost everyone has blunted some of the initial intent to create a comprehensive set of market guidelines.

What the guidelines provide, however, is a sensible outline of the respective responsibilities shared by providers and distributors - even if some are merely commandments that require distributors to honour the marketing material of manufacturers.

Some of the principles are already adhered to, and none are so leftfield that market participants will need to greatly adjust their practices. Perhaps the most relevant aspect of the conventions will lie in the field of dispute resolution. Any court of law is bound to seek some evidence of established market practice - a notoriously difficult process in the casual world of self-regulation. Now, at least, the lawyers will find an acceptable place to start.

On another note, I would like to introduce myself as the new editor of Structured Products. I am taking over a magazine left in fine health by launch editor Paul Lyon, and look forward to developing a relationship with as many of you as possible.

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