This blog post continues our expert analysis of complex investments and their regulation.
IOSCO has published a consultative piece on the regulation of retail oriented structured products. (Press Release, Paper) As you can read, there is much confusion about structured products, even at this level. For example:
- There is no clear definition of a "retail client";
- There is no clear definition of "structured product"
There are some things that are clear though:
- The products are complex;
- There is a large amount of issuance;
- There have been many blowups of structured products in the recent past
Investors and advisors alike should be wary of structured products because of their complexity and high costs.