Fairmat Cloud, the easiest way to get IOSCO compliant analyses on Structured Products.

In December 2013 IOSCO (International Organization of Securities Commission) set out a toolkit (12 “Tools”) of best practices for the regulation of retail structured products (eg. structured notes, funds and deposit), with the goal of enhancing investor protection.

This document was inspired by recent policy actions; one of these happened in UK on March 2012 where FSA issued a set of guidelines for the development and governance of structured products to support the use of simulation techniques to allow the investor to understand the expected results of a structured financial product associated with their likelihood of realization (Annex 1 A1.5).

IOSCO suggests certain commonly understood approaches to what can be done to address Issues relating to retail structured product. Among other qualitative information, these are the quantitative indications to provide to investors (Tool 8):

  • potential downside risk;
  • expected returns;
  • scenario analysis;
  • risk indicators;
  • reasonable comparison to alternative investment products;
  • circumstances to early termination.

Also backtesting analysis is welcome, provided the disclosure is not misleading (Tool 12).

These kind of independent assessment is also recently recommended by ESMA both to Manufacturer and Distributor in order to test structured retail products (Opinion 2014/332, product testing). 

Our new service, Fairmat Cloud, is the easiest way to get these independent analytics affordably.

Our innovative service: Fairmat Cloud

With Fairmat Cloud just seek for a product on https://cloud.fairmat.com, require an Independent Quantitative Report, and you will obtain a report like this one containing:

  • A short description of the functioning of the product;
  • The underlying and duration of the product;
  • Valuation of Potential Downside Risk and Risk indicators;
  • Applicabile guarantee schemes;
  • Probabilistic product's outcomes and expected returns;
  • back-testing analysis;
  • Reasonable comparisons for each analytics to alternative investment products;
  • Fees and cost involved (Tool 9);
  • What circumstances (and their probabilities) can give rise to early termination or redemption of the product;
  • Whether investors have the ability to exit the product before its maturity.

Since these are all standardized indicators you can also get the same results for other products on same asset classes, or issued by the same Issuer and hence use the report to compare products (Tool 7).

If the product you are looking for is not mapped yet, you can report it to our team that will make it available in a few days. In the Fairmat Cloud service are also available the Templates we used to map all the structured products you can find in our repository.

Issuers can use the templates to design product features to meet investor needs (Tool 3) and also stress test all the parameters of the product by mean of sensitivity analysis.

All these analyses are available for just € 25.

For further informations read the walk-trough presentation or  contact us. To start using Fairmat Cloud go to cloud.fairmat.com