LONDON, Monday, May 23, 2011 – The Joint Associations Committee on Retail Structured Products is pleased to announce it is reaffirming the set of principles for managing the provider-distributor relationship (PD Principles) in retail structured products and the principles for managing the distributor-individual investor relationship (DI Principles), originally published in July 2007 and July 2008 respectively.
The Principles were drafted with the intent of achieving fair treatment for individual investors and clarifying the respective roles and responsibilities of the various parties involved in the creation and distribution process. The years since 2008 have seen increased recognition by governments and regulators of the importance of a vibrant and well-functioning retail structured products market.
A combination of demographic trends and the impact of the financial crisis have resulted in a greater onus on individuals to take responsibility for their long-term financial planning and, in particular, to make private financial provision for their retirement. Retail structured products will play a key role in meeting such increased investment demand. However, the financial crisis has also impaired investor confidence. Such considerations have led to regulatory initiatives designed to improve investor protection in multiple jurisdictions.
While originally published before the financial crisis, the Principles address many of the same issues as those sought to be addressed by such initiatives and it is in this context that the JAC feels that now is an appropriate time to re-release the Principles in order to both encourage their usage and help inform the current debate.
Tim Hailes, Chair of the Joint Associations Committee, said: “The JAC is extremely supportive of the regulatory initiatives undertaken to improve investor protection and is fully committed to working with governments and regulators to facilitate positive consumer outcomes. The JAC has been an active participant in the consultation process in multiple jurisdictions and looks forward to continuing participation in these important discussions.”
He continued: “Each set of Principles is the result of long and careful deliberation, which the sponsoring associations believe has contributed to their continuing and broad relevance. The associations accordingly welcome further expressions of support for the Principles from financial-services industry groups, as well as continuing dialogue with all interested regulatory and legislative bodies.”
To view the re-stated Combined Principles for Retail Structured Products, please visit SIFMA's Securitized Products Standard Forms and Documentation Library