Swiss Trade Group Shines Brighter Light On Structured Product Risks

Osmond Plummer

24 October 2008

The Swiss Structured Products Association acted to improve clarity about the risks in its sector by announcing it will now publish its 17 members’ ratings and credit spreads on its website www.sspa-association.ch.

It is hoped that this information, together with structured product term sheets, will help investors work out the underlying risk of individual structured products relatively easily. Ratings and credit spreads are to be updated weekly on the website.

“This new investor service illustrates the association’s goal of making structured products more transparent,” SSPA President Roger Studer said in a statement.

The rating and credit spread information will be provided by the issuers.

“Ratings and credit spreads are important structured product investment criteria. These cannot take the place of consultations with investment advisors and it must be remembered that diversification is key to maximizing investor security at reasonable cost,” SSPA chief executive Eric Wasescha, said.

WealthBriefing reported recently on the lack of appreciation of product risk by many investors. This response from the SSPA is to be welcomed as a part of the process of informing investors at to the real risks that they face when they purchase a structured product.