Structured Products for Retail Investors: Lessons from Germany

October 25, 2007

Abstract

Paris, France 25 October, 2007

German retail investors have a breathtaking array of almost 250,000 structured products or warrants to choose from. This report examines this market and assesses the potential in other regions.

Structured products, sometimes referred to as warrants or certificates, have become popular in a number of European countries, particularly in Norway, Germany, and Switzerland. However, the German market stands out in terms of the size and depth of its market. With almost 250,000 instruments traded, retail investors can select from a bewildering array of derivative structured products from mundane call or put options in indices to highly complex derivatives based on baskets of equities, commodities, interest rates, or currencies. As extraordinary as the current number of structured products is, German banks are pumping new products into the market at a staggering rate of about 1,500 new instruments per day.

A new Celent report, , examines the German market, including a review of product types, trading volumes, and distribution channels, and draws conclusions regarding the applicability of such instruments to other markets.

"The German experience with structured products suggests that there are large, untapped pools of potential products for retail customers in other countries, particularly the simpler structured products. However, regulatory hurdles in a number of countries pose a formidable hurdle to their introduction," says Octavio Marenzi, author of the report.

The 19-page report contains nine figures and two tables. A table of contents is available online.

Members of Celent's Retail Securities & Investments research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
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Table of Contents

Paris, France 25 October, 2007

Executive Summary 03
Introduction 04
Market Overview 08
  Product Types 08
  Trading Volumes 11
Distribution Channels 13
  Exchanges 13
  Citibank CATS 13
  Direct 14
Conclusions 19

 

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