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.
Our previous coverage of structured products can be found here, here, and here.