SRP Asia Pacific Awards Report 2021 by SRP & FOW

SRP Asia Pacific Awards Report 2021

Contents 1.1 Introduction

..................................................................................................................................................................................................................

1.2 Scope

1.3 Methodology

2.1 Management summary: unchartered waters 3.0 Trends & Predictions

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..............................................................................................................................................................................

Industry News SK watchdog implements new guidelines as mis-selling debacle reverberates

Thai regulator lowers net-worth requirement for SP investors

4.0 Manufacturer Awards

...................................................................................................................................................................

5.0 Distributor Awards

...............................................................................................................................................................................

6.0 Shortlists

Interview with SRP’s Asia Pacific Personality of the Year 2021

7.0 Awards Results

...............................................................................................................................................................................................

SRP Asia Pacific Awards Report 2021 Editorial: Amélie Labbé, Pablo Conde and Summer Wang Data: Iveta Pekova, Veselin Krastev, Lachezara Tsenova, Daniel Semerdzhiev If you are interested in having a similar bespoke report produced for your organisation, please contact Jack Stannard at +85234166674 or email Jack@StructuredRetailProducts.com

SRP Asia Pacific Awards Report 2021

1.1 Introduction

The company, founded in 2001 counts major global financial services groups, financial regulators, stock exchanges, index providers and professional services firms as clients.

• photocopied or printed for multiple use, except for within the organisation for which it was purchased; or

This report is copyright © 2021 Structured Retail Products Limited. All Rights Reserved. Reproduction and distribution of this report in any form without prior written permission is strictly prohibited.

• distributed electronically or otherwise in a manner other than that described above.

Indemnity

The information contained herein has been obtained from sources believed to be reliable. SRP disclaims all warranties as to the accuracy, completeness or adequacy of such information. Use of this report is at your sole risk, and SRP accepts no responsibility for any problems or incidents arising from its use.

Acknowledgements

This report would not have been possible without the support of the structured product industry across Asia. SRP would like to thank participants in the SRP survey from 20 January 2021 to 20 March 2021, whose data underpins this report.

Manufacturer Awards

SRP also owns and maintains the specialist industry website StructuredRetailProducts.com, which went live in January 2003, and has since become the leading online information source for the global retail structured products industry. With more then 15,000 registered users and more than 30.2 million product listings (as of May 2021), the website is the primary information source for a wide range of businesses involved in the manufacture and distribution of structured investment products globally.

• sold for commercial gain, either in part or in its entirety;

Asia Pacific Summary

Furthermore, this report may not be:

Introduction

Structured Retail Products Limited (SRP), part of the Euromoney group of companies, is a provider of structured product data, news and events insights based in London, New York, Hong Kong and Sofia.

Distributor Awards Awards Results Appendix

SRP Asia Pacific Awards Report 2021

1.2 Scope Introduction

This report is concerned with the manufacture of structured products in all product forms including wrappers such as funds, notes, bonds, certificates, deposits and life assurance, and usually linked to equities, foreign exchange, commodities, hybrids and interest rates underlyings.

Asia Pacific Summary Manufacturer Awards

It presents information on structured retail product markets across the Asia Pacific region. Although the term structured product is widely used in the financial community, the term can often have different meanings. For the purposes of this report, a structured product is an investment product providing a predefined return linked to the price of one or more underlying assets. These are usually financial prices, rates or indices, but in rare cases can be sporting or other events. The product can usually be broken down into several separate financial instruments, one of which is usually a derivative product. Where a derivative is not used, the product will use derivative-based investment strategy or computation to provide the return. Although simple warrants, listed options and futures, and delta one products such as tracker

funds, exchange-traded funds and exchangetraded notes are excluded, reference to these products may be made where relevant. The report is based on both quantitative and qualitative analysis. StructuredRetailProducts.com (SRP) surveyed structured products distributors across Asia Pacific between January 2021 and March 2021, collecting data on structured product manufacturers from the point of view of their distributor clients. The results from the survey form the basis of this report. Details of both the quantitative and qualitative analyses are available in the Methodology section of the report.

The report provides the following information: 1. the scope, methodology and management summary of the report’s key findings; 2. an analysis of the structured products market in the Asia Pacific region based on survey responses; 3. a separate analysis of the manufacturers by asset class; and 4. an analysis of top distributors’ awards.

Distributor Awards Awards Results Appendix

SRP Asia Pacific Awards Report 2021

1.3 Methodology StructuredRetailProducts.com (SRP) surveyed Asian structured products distributors between 20 January 2021 and 20 March 2021. The survey comprised three areas of investigation:

Part 1 Quantitative

Part 2 Qualitative

• price competitiveness; • innovation and structuring capability; and • client service pre- and post-trade.

• Providers voted for themselves. • We could not confirm the identity of the respondent. • A respondent voted more than once and we could not resolve the duplication. The survey results underpinned the 2021 SRP AsiaPacific Awards, which were handed out on 16 June 2021 during the 8th Annual Asia Pacific Conference. For the purpose of this report, the scores for each key service category for the individual banks are calculated by averaging. Service scores are, therefore, suggestive of the level of service that a client might expect to receive when working with an investment banking counterparty.

Manufacturer Awards

The respondents were then asked to rank the investment banks they dealt with for each asset class based on a score of 1, 2 or 3 (where 1 = below average; 2 = average; 3 = above average) according to three key service categories:

Captive votes and those representing internal transaction flows were excluded from the results. This includes votes cast by distributors that are part of banking groups which use their parent group for 100% of their activity and internal structuring desks. Also, votes were not included in the survey where:

Asia Pacific Summary

We asked respondents to the survey to specify three investment banks that they use for hedging purposes, for each asset class in which the respondent was active. They also had to specify the volume of business for each asset class and the percentage split by bank.

Part 3 Data validation

Introduction

Description of the Survey

Distributor Awards Awards Results Appendix

SRP Asia Pacific Awards Report 2021

2.1 Management summary: unchartered waters Introduction

Looking back on 2020 and the state of the world and markets then, I am unsure where to start this management summary.

Asia Pacific Summary

Hindsight may bring some clarity and meaning to events that have previously unfolded but unpicking the consequences of the Covid-19 pandemic on markets, volumes and attitudes will be an exercise that will take place for years to come.

Manufacturer Awards

As I wrote last year, 2019 was by no means a banner year in terms of issuance, volumes and the general level of activity in the Asia Pacific region, and the expectation was that 2020 would continue in the general downward trend first seen in 2018. However, while both product issuance and sales volumes undeniably took a hit because of market conditions, it was more of a slowing down than a shutting down of activity as participants regrouped to adapt to the so-called new normal. One key takeaway from last year’s award survey was that the market was moving onwards and upwards. Fundamental metrics in the region were

improving as Apac was on the receiving end of positive asset flows and regional growth, including in China. The pandemic didn’t put a stop to that, instead applying temporary breaks and dynamics. A key finding of this year’s survey highlights China’s role as a kick-starter to growth – Hong Kong SAR and Taiwan saw total sales volumes in 2020 nearly double in 2019 levels, boosting their respective market shares – but also hints at a possible route for Asian markets. Taiwan, for instance, saw a huge growth in issuance towards the latter part of 2020, which raises expectations for an even stronger year ahead. Its regulation has been quite accommodative to the development of the local structured product market, unlike other jurisdictions, as noted by one survey respondent from a private bank in Singapore. For its part, Japan saw an increase in sales volume across multiple product types, with interest ratelinked products an area to watch.

Distributor Awards

Outstanding Issuance and Volumes 2017-2020 YTD

Awards Results

500000

100,000

400000

80,000

300000

60,000

200000

40,000

100000

20,000

Appendix

2017

2018

Outstanding sales volume (USDm) (LHS)

Source: Structuredretailproducts.com

2019

2020

Outstanding products issuance (RHS)

SRP Asia Pacific Awards Report 2021

Market share by sales 2017 - 2020 YTD Introduction

100% 90% 80% 70%

Asia Pacific Summary

60% 50% 40% 30% 20% 10%

2017

2018 Hong Kong

2019 Japan

South Korea

2020

Taiwan

Source: Structuredretailproducts.com

Service scores

This year’s scores are as follows: price competitiveness – 2.87 (2019: 2.72; 2018: 2.51);

Markets in many places globally seem disconnected from the reality of the pandemic, which is still wreaking havoc in numerous countries. While economies are still lagging in certain aspects, financial markets jumped at the opportunity for recovery months ago, with the US one notable example. US indices and underlyings have historically been popular with Asian investors, the S&P 500 a go-to choice for many in the markets markets of South Korea, Hong Kong SAR and Singapore - but could pose some pricing and valuation challenges. ‘The US will continue to be a popular market for investors,’ noted one banker from Singapore. ‘The challenge will be how to risk manage the downside for clients, given the US markets are making new highs.’ The ongoing political and commercial tug of war

Appendix

Understandably, the score for innovation and structuring capability, and pre- and post-trade client services, were down on previous year levels given ongoing instability. However, given the previous survey comment, it was to be expected that the score for price competitiveness was up on 2019 and 2018 levels, as this is one aspect that issuers and distributors have needed to work on to hang on to demand in a context of volatility and low interest rates.

Taking stock

Awards Results

The latest review of the performance of structured product providers delivers a mixed message which is to be expected given how choppy markets have been in the past 18 months.

innovation and structuring capability – 2.37 (2019: 2.67; 2017: 2.47); and pre- and post-trade services: 2.40 (2019: 2.57; 2018: 2.47).

Distributor Awards

‘China will be a key trend in 2021 as [it] recovered faster [after the] Covid-19 pandemic,’ noted one buy-side respondent. ‘However, the Asian yield pick-up pales in comparison to US markets. Hence the challenge will how attractive will the yield pickup be in 2021 relative to the US.’

Manufacturer Awards

SRP Asia Pacific Awards Report 2021

Market by total sales (USDm) 2017 - 2020 YTD Introduction

140,000 120,000 100,000

Asia Pacific Summary

80,000 60,000 40,000 20,000

Manufacturer Awards

0 Hong Kong

Japan 2017

South Korea 2018

2019

Taiwan

2020

Source: Structuredretailproducts.com

Distributor Awards

that is the China-US trade war may have taken a backseat in the past year but it’s never far from the headlines. Uncertainty as to which direction this battle is going – and the worry brought on by the pandemic spreading - has fed into the ongoing issue of low volatility (and related tight pricing/ spread issues) and a general lack of market direction – a concern outlined consistently by respondents everywhere including in Taiwan, Singapore, South Korea, Australia and Hong Kong SAR.

Awards Results

Many of these felt that circumstances were pushing investors towards more demand for ‘downside protection/yield/defensive plays’.

currency conversion and risk diversification respectively,” explained one Malaysian banker. In last year’s survey, the search for yield in the current low rate environment was also a key (ongoing) wish shared across markets and jurisdictions, and this went hand-in-hand with ‘innovation in terms of underlyings’. On the index side, one banker noted that providers should look at making ‘the strategies simpler and easier for investors’ consumption and [provide] more transparency’.

Appendix

As such, respondents listed two types of instruments that they believe could be an answer to their demands.

The demand for innovation appears time and time again SRP surveys (not only in Asia Pacific), be it when it comes to underlyings or payoff types, though challenging market conditions may make this a more complex undertaking.

‘Currency investments and gold-linked investment structures continue to be a popular choice for

*SRP’s Asia Pacific survey 2021 was conducted between January and April 2021.

Looking ahead

SRP Asia Pacific Awards Report 2021

Service scores - Apac awards 2021 Introduction

3 2.5 2

Asia Pacific Summary

1.5 1 0.5 0

Industrial Average 2018

Source: Structuredretailproducts.com

Innovation and structuring capability Industrial Average 2019

Client Service pre and post-trade Industrial Average 2020

Manufacturer Awards

Price Competitiveness

Distributor Awards Awards Results Appendix

SRP Asia Pacific Awards Report 2021

3.0 Trends & Predictions Introduction

What will the most popular payoffs be over the next 12 months for your market?

Volatility-based investments 11%

Asia Pacific Summary

Proprietary/Custom indices 6%

Credit 5%

Environmental Social Governance (ESG) 5%

Manufacturer Awards

Equity - Emerging Markets 17%

Equity - Developed Markets 56%

Distributor Awards Awards Results

The autocallable payoff will remain the most popular in the Asia Pacific region over the coming 12 months, according to one-third of the responses in the SRP Asia Pacific Awards Survey 2021. This payoff, also combined with other payoffs, accounted for a little less than 53% of the market in terms of volume sold in 2020, which is 14% down from its SRP Asia Pacific Awards Survey 2020’s projection. The next most favoured payoff is the dual currency, which attracted 28%

of the vote mainly from Malaysia. The reverse convertible rose to third place, with 22% of the votes, primarily from Singapore. The worst of option payoff, which is mainly utilised in key markets such as South Korea, Hong Kong and Taiwan, shares the fourth place with the digital option. Both gathered six percent of the votes and rose in the ranking compared to the previous year when they received two percent of the votes each.

Appendix

SRP Asia Pacific Awards Report 2021

Introduction

Which of the following investment themes will be the most prominent over the next 12 months?

Worst-of Option 6%

Reverse Convertible 22%

Volatility-based investments managed to retain the third place in this year’s survey, while environmental, social governance investments saw a decrease in interest with only five percent of votes, compared to the 13% it received in the 2020 survey.

Equities from emerging markets saw an increase from last year’s six percent and came in second 17% of the votes, due to increased demand for diversifying investments into global markets.

Proprietary and custom indices saw a one percent increase in votes and finished fourth on that list, compared to the five percent and the sixth place it received in the 2019 survey.

Awards Results

Similar to the results from the 2020 survey, equities from developed markets are expected to continue to be the dominant investment theme over the next 12 months, according to 56% of the responses in the survey.

Distributor Awards

Digital 6%

Manufacturer Awards

Callable 5%

Dual Currency 28%

Asia Pacific Summary

Autocallable 33%

Appendix

SRP Asia Pacific Awards Report 2021

Introduction

SK watchdog implements new guidelines as mis-selling debacle reverberates The Financial Services Commission (FSC) has implemented a series of regulatory measures in South Korea following the mis-selling incident in August 2019. We recap the major regulatory moves as they gradually take into effect. By Summer Wang

Asia Pacific Summary

Banks play a significant role in distributing nonlisted structured products in South Korea. Financial institutions (FIs) are required to record their sales process when such products to elderly investors - the recording and deliberation system will be put into use on 10 August.

Manufacturer Awards

Focus on ‘highly complex products’

Distributor Awards

The dominant products in the South Korean market are equity-linked securities (ELS), equity-linked bonds (ELB), derivative-linked securities (DLS) and derivative-linked bonds (DLB), which are traded over-the-counter - together had a balance of KRW82.8 trillion (US$74.9 billion) at the end of March 2021. Equity-linked warrants (DLW) and equity-traded notes (ETN) listed on the Korea Exchange account for a small market share.

Awards Results

ELS and ELB track equity indices, stocks, ETFs and ETNs while DLS/DLB are tied to credit performance, ETF, private equity funds, interest rates or commodities. ELB and DLB offer full principal protection while ELS and DLS don’t.

Latest regulatory changes

Appendix

Effective 10 May, a cooling-off period of at least two business days must be given to all investors of ‘highly complex investment products’. The investment agreement will become valid only when the investors reaffirm their initial decision after the cooling-off period. The criterion for ‘elderly investors’ is lowered to the age of 65 or above, from 70 or above previously.

The products are defined as non-listed ‘derivatives products, derivative linked securities and derivative-linked funds (trust, discretionary)’ that can lead to principal loss higher than 20%, according to the finalised measures the SFC announced on 12 December 2019. Specifically, they apply to ELS and DLS with no more than 80% of capital protection. These criteria went into effect on 2 February 2021 along with other major regulations including the increased minimum investment threshold in private equity funds from KRW100m to KRW300m for retail investors. In addition, if a fund’s profit and loss structure is equivalent to that of its underlying asset, the fund must be sold as a public offering fund. It aims to prevent FIs from avoiding stringent regulation on public offerings by choosing private placements.

Limits on banks Under the new rules, banks can only sell publiclyissued equity-linked trusts (ELT) that track any of the five major market indices – Kospi200, S&P 500, Eurostoxx 50, HSCEI and Nikkei 225 – when it comes to highly complex investment products. Moreover, their ELT balance amount shall not exceed the level seen at the end of November 2019. Banks play a significant role in distributing non-

SRP Asia Pacific Awards Report 2021

Securities houses will also calculate their current liabilities from the time of early redemption instead of the time of final maturity and adopt the same currency liquidity ratio rules as financial investment companies. For ELS and DLS with offshore underlyings, the securities houses must expand the weight of debt on leverage ratio for higher volume of the issuance more than 50% of equity capital. To resolve the issue of currency mismatches between underlying and hedging assets, and concentration toward debt issued by credit finance business, a certain level (10% to 20%) of liquid asset holdings in foreign currency is required for ELS hedging that tracks offshore underlyings and a limit is set to incorporating debt issued by credit finance businesses to up to 10% of the total hedge assets. In the meantime, the government is in the process of setting up infrastructure for an integrated data platform to provide information across all structured product types and an exchange-based platform where investors can sell structured products prior to their maturity. The project will be completed by the end of 2021.

Appendix

The measures have also introduced internal guidelines for reform at banks and securities houses with a focus on sales practice. For example, financial institutions are required to keep relevant documents and data for 10 years and immediately submit such documents upon investors request. The classification of investors will be renewed at a regular basis within one to two years instead of one to three years.

As reported, securities houses are required to conduct stress tests reflecting more extreme case scenarios, for example, a drop of between five and 50% in underlying asset value, and to set up contingency plans to bolster their foreign currency reserves for ELS hedging.

Awards Results

Additionally, the SFC will set up rules specifying what asset management companies and FIs will have to follow at every stage of the brokerage process. This includes the tightening of standards for FIs selling original equipment manufacturer (OEM) funds, which are established and operated by asset management companies upon ‘order, direction, request’ of sellers. The two DLFs mis-sold in 2019 were OEM funds.

The move came as the low interest rates environment made retail structured products attractive, which may lead to burdens on foreign exchange market and short-term money markets due to large volume of issuance.

Distributor Awards

Banks play a significant role in distributing nonlisted structured products in South Korea

On 30 July 2020, the SFC released plans to ‘improve rules on structured products’ with an aim to enhance securities firm’ capability of dealing with market volatility and to encourage reduction of issuance sizes as well as diversified investment for hedge assets.

Manufacturer Awards

The limit on banks impacted the non-principal protected note market even before it officially went into effect on 2 May 2021. The SFC initially proposed to ban on such products at banks on 17 November 2019 when it first released a series of measures to ‘strengthen investor protection’ in wake of the mis-selling incident.

Product governance and risk management

Asia Pacific Summary

For ELS, retail investors made up about 98%, or KRW40.4 trillion at March-end 2020. About 82% of all ELS issuance, or 88% of ELS issued to retail investors was distributed through banks, said the FSC.

Mis-selling financial products are subject to punitive fines up to 50% of unfair gains, fines of up to KRW30m and shift of the burden of proof.

Introduction

listed structured products in South Korea in the form of ELT, derivative-linked trusts (DLT), equity-linked funds (ELF) and derivative-linked funds (DLF). Approximately 40% of the total balance of ELS/ELB/DLS/DLB, or KRW49.8 trillion, was incorporated through banks as at the end of June 2019. ELT and DLT together contributed KRW42.8 trillion out of it, according to data from the FSC.

SRP Asia Pacific Awards Report 2021

Introduction

Thai regulator lowers net-worth requirement for SP investors The country’s regulator is seeking to reclassify investors, which will enable non-retail investors with reduced net worth to access non-principal-protected notes

Asia Pacific Summary

Under the proposal, retail investors will be limited to invest in products that meet the regulator’s quality, information and plain (QIP) requirements, including stocks, real estate investment trusts (REITs), general debentures with credit ratings, perpetual bonds, investment-grade bonds, structured notes with capital protection, futures and derivative warrants.

Manufacturer Awards

In the meantime, structured notes with no capital protection – to be classified as ‘complex or highrisk’ products - will be available to the other groups with AI being required to have net worth above THB30m , which is lower than the THB50m and THB70m currently set for HNW and UHNW investors, respectively.

The Securities and Exchange Commission (SEC) is seeking to redefine its investor classification based on their affordable loss, investment knowledge and experience, which will comprise professional investors (PI), qualified investors (QI), affluent investors (AI) and retail investors.

Distributor Awards

If the rules are passed, the minimum net-asset required for investors eligible for non-principalprotected notes, which offer less than 80% of capital protection by definition, will drop to THB30m (US$960,507) from THB50m while retail investors continue to be limited to principalprotected notes.

Awards Results

The current investor segments consist of institutional investors, high-net-worth (HNW) as well as ultra-high-net-worth (UHNW) investors and retail investors according to their affordable loss. And only institutional and HNW/UHNW investors are eligible for non-principal-protected structured product investments.

Appendix

‘This will expand the pool of potential qualified investors and offer more opportunities for them to be able to invest in more variety of assets to increase their wealth,’ stated the SEC in a consultation report. ‘Also, this would increase the capital available for the fundraising tools responding to underserved sectors, which tend to be riskier, while still maintaining the appropriate investor protections.’

Additionally, products linked to exotic assets will be defined as ‘super risky,’ only accessible by PI and QI - they include the Basel III tier I instruments that are non-investment grade, insurance capital bond, distressed bond fund and private equity trust. Individuals with an investment planner (IP) or investment consultant (IC) licence can only be classified as PI for products for which they are licensed. Holders of IP and IC licences or individuals with any certified investment licences such as CFA or CISA can also qualify as AI and QI if they meet the financial criteria. ‘Apart from investor segmentation, the proposed amendments also aim to ensure investor protection for investments in certain high-risk assets either by scoping the potential impacts within the narrow group of investors or by imposing the investment limit per investor,’ stated the Thai regulator. The amendments are expected to come into force on any financial product regulated by the SEC except cryptocurrency. The consultancy paper (in Thai) opened for comments until 21 May.

SRP Asia Pacific Awards Report 2021

Eligibility for each type of investors in Thailand (proposed by the SEC)

Qualified Investor (‘QI’)

Investors who understand the products and their risk. For a natural person, they have net assets not less than THB60m, OR annual income of not less than THB6m, or investment portfolio including deposits of at least THB30m. For a juristic person, their shareholder’s equity not less than THB150m, OR investment portfolio of at least THB60m

Affluent Investor (‘AI’)

For a natural person, they have net assets not less than THB30m, OR annual income of not less than THB3m, OR investment portfolio including deposits of at least THB15m. For a juristic person, their shareholder’s equity not less than THB75m, OR investment portfolio of at least TBH30m

Awards Results

Source: The Securities and Exchange Commission (SEC)

Distributor Awards

Investors who have a good understanding of investment products and are likely to take the greatest risk from investment, including venture capital and private equity firms. For individual investors, they have a management license for general mutual funds and invest in future contracts, OR have an investment analyst/advisor license, OR are a specilist of SME/startup businesses (angel investor), OR are equipped with in-depth business knowledge.

Manufacturer Awards

Professional Investor (‘PI’)

Asia Pacific Summary

CRITERIA

Introduction

INVESTER CATEGORY

Appendix

SRP Asia Pacific Awards Report 2021

4.0 Manufacturer Awards Introduction

These awards are calculated on the basis of the following factors.

Asia Pacific Summary

• Survey of market – each factor has a 25% weighting. - price competitiveness; - innovation and structuring capability; - client service pre- and post-trade; and - sales volume. • Editorial Submission Each shortlisted manufacturer will need to submit an editorial piece of up to 400 words. The winner will be selected by an independent panel of judges convened and chaired by SRP.

Manufacturer Awards

Best House, Asia Pacific Survey ranking

Editorial ranking

30 BNP Paribas

25 20

Citi

Credit Suisse

Distributor Awards

10 J.P. Morgan 5 UBS

0 BNP Paribas

UBS

Price Competitiveness

Citi

JPMorgan

Innovation and Structuring

Credit Suisse Client Service

Awards Results

Best House, Equity Survey ranking

Editorial ranking

30 BNP Paribas

25 20

Citi

Appendix

Goldman Sachs

10 J.P. Morgan 5 UBS

0 BNP Paribas

Citi

Price Competitiveness

UBS

Goldman Sachs

Innovation and Structuring

JPMorgan

Client Service

SRP Asia Pacific Awards Report 2021

Best House, Asian Equity Survey ranking

Editorial ranking Introduction

30 BNP Paribas

Credit Suisse

20 15

Goldman Sachs

J.P. Morgan 5 Société Générale

0 BNP Paribas Société Générale Price Competitiveness

Credit Suisse

JPMorgan

Innovation and Structuring

Goldman Sachs 0

Client Service

Survey ranking

Manufacturer Awards

Best House, US Equity Editorial ranking

30 BNP Paribas

25 20

Citi

Asia Pacific Summary

Goldman Sachs

J.P. Morgan 5 UBS

0 JPMorgan

UBS

Price Competitiveness

BNP Paribas

Goldman Sachs

Innovation and Structuring

Citi 0

Client Service

Awards Results

Best House, South and Southeast Asia Survey ranking

Editorial ranking

30 BNP Paribas

25 20

Distributor Awards

Citi

HSBC

Appendix

10 J.P. Morgan 5 UBS

0 BNP Paribas

UBS

Citi

JPMorgan

HSBC Bank 0

Price Competitiveness

Innovation and Structuring

Client Service

SRP Asia Pacific Awards Report 2021

Best House, Japan Survey ranking

Editorial ranking

Introduction

30 Barclays Bank

25 20

BNP Paribas

Credit Suisse

Asia Pacific Summary

10 Société Générale 5 Morgan Stanley

0 Barclays Bank

BNP Paribas

Price Competitiveness

Credit Suisse

Société Générale

Innovation and Structuring

Morgan Stanley 0

Manufacturer Awards

Best House, South Korea Survey ranking

Editorial ranking

30 Credit Suisse

25 20

Goldman Sachs

Distributor Awards

Client Service

J.P. Morgan

10 Société Générale 5 UBS

0 Credit Suisse

Goldman Sachs

Price Competitiveness

J.P. Morgan

Société Générale

Innovation and Structuring

UBS 0

Client Service

Awards Results

Best House, Hong Kong Survey ranking

Editorial ranking

30 BNP Paribas

25 20

Citi

Credit Suisse

Appendix

10 J.P. Morgan 5 UBS

0 BNP Paribas

Citi

Price Competitiveness

Credit Suisse

J.P. Morgan

Innovation and Structuring

UBS

Client Service

SRP Asia Pacific Awards Report 2021

Best House, Taiwan Survey ranking

Editorial ranking Introduction

30 Credit Suisse

25 20

DBS Bank

Morgan Stanley

Société Générale 5 0

UBS Credit Suisse

DBS Bank

Price Competitiveness

Morgan Stanley

Société Générale

Innovation and Structuring

UBS Client Service

Asia Pacific Summary

Manufacturer Awards Distributor Awards Awards Results Appendix

SRP Asia Pacific Awards Report 2021

5.0 Distributor Awards Introduction Asia Pacific Summary

The award for Best Distributor is based on full sales and performance data per product distributed by the buy-side between 1 December 2019 and 31 December 2020. The strike date is relevant for best sales and maturity date is relevant for best performance. The results of both are amalgamated and put towards the best distributor award. Sales volume represents total sales invested rather than the notional amount, and performance is the annualised return an investor would have received with a buy-and-hold approach from the strike date until maturity for a product. Each product’s performance is weighted according to its sales volume to give a weighted average performance of the distributor’s portfolio of maturing products for the period.

Best Distributor, Asia Pacific Oustanding Sales Volume & Issuance 2017 - 2020

Sales Volume & Issuance 2017 - 2020

Manufacturer Awards

60,000

800,000

50,000

250,000

40,000

200,000

30,000

150,000

20,000

100,000

10,000

50,000

600,000 400,000 200,000 0 2017

2018

2019

Total Volumes (USDm) (LHS)

2020

100,000

300,000

1,000,000

80,000 60,000 40,000 20,000

0 2017

Total issues (RHS)

2018

2019

Total Volumes (USDm) (LHS)

Distributor Awards

Top 5 distributors by sales (US$m)

2020 Total issues (RHS)

Top 5 distributors by weighted-average performance (%) 100

70000 60000

50000 60

40000 30000

20000

10000 0

Awards Results

Hang Seng Bank

HSBC Bank

Bank SinoPac

Far Eastern International Securities

KGI

Far Eastern International Securities

KGI

Bank SinoPac

HSBC Bank

Hang Seng Bank

Appendix

SRP Asia Pacific Awards Report 2021

Distributor, South and Southeast Asia Sales Volume & Issuance 2017 - 2020

40,000

9,000

18,000

16,000

35,000

8,000

16,000

14,000

30,000

7,000

14,000

12,000

6,000

12,000

5,000

10,000

4,000

8,000

25,000 20,000 15,000

10,000 8,000 6,000

6,000

2,000

4,000

5,000

1,000

2,000

2017

2018

2019

Total Volumes (USDm) (LHS)

2020

Total issues (RHS)

2017

2018

2019

Total Volumes (USDm) (LHS)

Top 5 distributors by sales (US$m)

2020 Total issues (RHS)

Top 5 distributors by weighted-average performance (%)

3500

100

3000

Asia Pacific Summary

3,000

10,000

Introduction

Oustanding Sales Volume & Issuance 2017 - 2020

2500 60

1500

1000 20

500 0

0 United Overseas Bank

Edelweiss Financial Services

IIFL Wealth Management

Centrum Capital

Reliance Group

Edelweiss Financial Services

Reliance Group

IIFL Wealth Management

United Overseas Bank

Oustanding Sales Volume & Issuance 2017 - 2020

Sales Volume & Issuance 2017 - 2020

45,000

16,000

140,000

60,000

40,000

14,000

120,000

35,000

50,000

12,000

30,000

10,000

25,000

8,000

20,000

6,000

15,000

4,000

5,000

2,000

2017

2018

2019

Total Volumes (USDm) (LHS)

20,000

40,000

10,000

20,000 0

2017

2018

2019

Total Volumes (USDm) (LHS)

Total issues (RHS)

Top 5 distributors by sales (US$m)

30,000

60,000

2020

40,000

80,000

2020 Total issues (RHS)

Top 5 distributors by weighted-average performance (%)

70000

Awards Results

10,000

100,000

Distributor Awards

Best Distributor, Hong Kong

Manufacturer Awards

2000

100

60000

50000

Appendix

40000 30000

20000 20

10000 0

Hang Seng Bank

HSBC Bank

Bank of East Asia

Bank of China (Hong Kong)

Leonteq Securities

Bank of China (Hong Kong)

Bank of East Asia

HSBC Bank

Hang Seng Bank

Leonteq Securities

SRP Asia Pacific Awards Report 2021

Best Distributor, Japan Oustanding Sales Volume & Issuance 2017 - 2020 Introduction

725,000 720,000

Sales Volume & Issuance 2017 - 2020 3,000

35,000

1,600

2,500

30,000

1,400

2,000

715,000

1,500 710,000

1,000

705,000

Asia Pacific Summary

2018

2019

Total Volumes (USDm) (LHS)

800

15,000

600

10,000

400

5,000

0 2017

1,000

20,000

500

700,000

1,200

25,000

200 0

2020

2017

Total issues (RHS)

2018

2019

Total Volumes (USDm) (LHS)

Top 5 distributors by sales (US$m)

2020 Total issues (RHS)

Top 5 distributors by weighted-average performance (%)

6,000

100

5,000

4,000 60

Manufacturer Awards

3,000

2,000

1,000 0 Mitsubishi UFJ Morgan Stanley Securities

Daiwa Securities

SMBC Nikko Securities

82 Securities

Tokai Tokyo Securities

0 Okasan Niigata Securities

Mito Securities

SBI Securities

Monex Securities

Okasan Securities

Distributor Awards

Best Distributor, Taiwan Oustanding Sales Volume & Issuance 2017 - 2020

Sales Volume & Issuance 2017 - 2020

60,000

14,000

50,000

12,000 10,000

40,000 30,000 20,000

Awards Results

2018

2019

Total Volumes (USDm) (LHS)

2020

10,000

30,000 25,000

8,000

6,000

20,000

6,000

2,000 2017

12,000

35,000

8,000

4,000

10,000

14,000

45,000 40,000

15,000

2,000

5,000

Total issues (RHS)

Top 5 distributors by sales (US$m)

4,000

10,000

2017

2018

2019

Total Volumes (USDm) (LHS)

2020

Total issues (RHS)

Top 5 distributors by weighted-average performance (%) 100

7,000 6,000

5,000

Appendix

4,000 3,000

2,000 20

1,000 0

DBS Bank

E.Sun Commercial Bank

BNP Paribas

Bank SinoPac

Far Eastern International Securities

0 Far Eastern International Securities

KGI

Bank SinoPac

First Securities

Cathay Securities Investment Trust

SRP Asia Pacific Awards Report 2021

Best Distributor, South Korea Oustanding Sales Volume & Issuance 2017 - 2020

Sales Volume & Issuance 2017 - 2020 30,000

120,000

30,000

100,000

25,000

100,000

25,000

80,000

20,000

80,000

20,000

60,000

15,000

60,000

15,000

40,000

10,000

40,000

10,000

20,000

5,000

20,000

5,000

0 2017

2018

2019

Total Volumes (USDm) (LHS)

0 2017

2020

2018

2019

Total Volumes (USDm) (LHS)

Total issues (RHS)

Top 5 distributors by sales (US$m)

2020 Total issues (RHS)

Top 5 distributors by weighted-average performance (%)

18,000

100

16,000 80

14,000 12,000

8,000

6,000 4,000

2,000 0 Mirae Asset Daewoo Securities

Korea Investment & Securities

Samsung Securities

Shinyoung Securities

KB Investment & Shinhan Securities Investment

Meritz Securities

Daishin Securities

Korea Hi Investment & Investment & Securities Securities

Oustanding Sales Volume & Issuance 2017 - 2020

Sales Volume & Issuance 2017 - 2020

16000

1600

400

500

14000

1400

350

450

12000

1200

300

10000

1000

250

8000

800

200

250

6000

600

150

200

4000

400

100

2000

200

2017

2018

2019

Total Volumes (USDm) (LHS)

2020

350 300

150 100 50 2017

Total issues (RHS)

Top 5 distributors by sales (US$m)

2018

2019

Total Volumes (USDm) (LHS)

2020

Total issues (RHS)

Top 5 distributors by weighted-average performance (%)

Awards Results

400

Distributor Awards

Best Distributor, India

Manufacturer Awards

10,000

Asia Pacific Summary

Introduction

120,000

100

80 80

70 60

Appendix

50 40

30 20

10 0 Edelweiss Financial Services

IIFL Wealth Management

Centrum Capital

Motilal Oswal

Reliance Group

Centrum Capital

Edelweiss Financial Services

Reliance Group

IIFL Wealth Management

SRP Asia Pacific Awards Report 2021

Best Capital-Protected Distributor, Asia Pacific Oustanding Sales Volume & Issuance 2017 - 2020

Sales Volume & Issuance 2017 - 2020

Introduction

600,000

12,000

50,000

500,000

10,000

40,000

400,000

8,000

300,000

6,000

200,000

4,000

100,000

2,000

Asia Pacific Summary

2017

2018

2019

Total Volumes (USDm) (LHS)

5,000 4,000

30,000

3,000 20,000

2,000

10,000

2020

6,000

1,000

2017

2018

2019

Total Volumes (USDm) (LHS)

Total issues (RHS)

Top 5 distributors by sales (US$m)

2020 Total issues (RHS)

Top 5 distributors by weighted-average performance (%)

12000

100

10000

8000

Manufacturer Awards

6000 40

4000

2000 0

0 Mirae Asset Daewoo Securities

Edelweiss Financial Services

IIFL Wealth Management

Centrum Capital

Reliance Group

Edelweiss Financial Services

Reliance Group

IIFL Wealth Management

Mirae Asset Daewoo Securities

Distributor Awards

Best Yield Enhancement Distributor, Asia Pacific Oustanding Sales Volume & Issuance 2017 - 2020 400,000

Sales Volume & Issuance 2017 - 2020 60,000

350,000

50,000

300,000 40,000

250,000 200,000 150,000

Awards Results

100,000

200,000

80,000

150,000

60,000

100,000

40,000

50,000

20,000

30,000 20,000

100,000 10,000

50,000 0

250,000

2017

2018

2019

Total Volumes (USDm) (LHS)

2020

2018

2019

Total Volumes (USDm) (LHS)

Total issues (RHS)

Top 5 distributors by sales (US$m)

2017

2020 Total issues (RHS)

Top 5 distributors by weighted-average performance (%) 100

60000 50000

40000

Appendix

30000 40

20000

10000

0 Hang Seng Bank

HSBC Bank

DBS Bank

Bank SinoPac

Far Eastern International Securities

Bank SinoPac

HSBC Bank

DBS Bank

Hang Seng Bank

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SRP Asia Pacific Awards Report 2021

6.0 Shortlists Introduction

6.1 Manufacturer Awards

Asia Pacific Summary Manufacturer Awards Distributor Awards Awards Results

Best House, Asia Pacific BNP Paribas Citi Credit Suisse J.P. Morgan UBS

Best House, US Equities BNP Paribas Citi Goldman Sachs J.P. Morgan UBS

Best House, South and Southeast Asia BNP Paribas Citi HSBC J.P. Morgan UBS

Best House, Equities BNP Paribas Citi Goldman Sachs J.P. Morgan UBS

Best House, Japan Barclays Bank BNP Paribas Credit Suisse Société Générale Morgan Stanley

Best House, South Korea Credit Suisse Goldman Sachs J.P. Morgan Société Générale UBS

Best House, Asian Equities BNP Paribas Credit Suisse Goldman Sachs J.P. Morgan Société Générale

Best House, Taiwan Credit Suisse DBS Bank Morgan Stanley Société Générale UBS

Best House, Hong Kong SAR BNP Paribas Citi Credit Suisse J.P. Morgan UBS

Best Distributor, Asia Pacific Hang Seng Bank HSBC Bank Far Eastern International Securities KGI Bank SinoPac

Best Distributor, South & Southeast Asia Edelweiss Financial Services Centrum Capital IIFL Wealth Management Reliance Group United Overseas Bank

Best Capital-Protected Distributor, Asia Pacific Centrum Capital Edelweiss Financial Services Reliance Group Mirae Asset Daewoo Securities IIFL Wealth Management

Best Performance, Asia Pacific First Securities Far Eastern International Securities Bank SinoPac Cathay Securities Investment Trust Yuanta Securities

Best Performance, South & Southeast Asia Centrum Capital Edelweiss Financial Services Reliance Group IIFL Wealth Management Société Générale

Best Yield Enhancement Distributor, Asia Pacific Hang Seng Bank HSBC Bank Far Eastern International Securities Bank SinoPac DBS Bank

6.2 Distributor Awards

Appendix

SRP Asia Pacific Awards Report 2021

Best Pricing and Risk Analytics Provider Avaloq Bloomberg Horizon Murex Numerix Refinitiv

Best Structured Product and Derivatives Exchange Hong Kong Stock Exchange Japan Exchange National Stock Exchange of India Singapore Stock Exchange Taiwan Stock Exchange

Best Issuance Platform – Multi-Dealer AG Delta Dealstation Bloomberg DLIB Contineo FinIQ EQ Connect Leonteq - Constructor

Best Law Firm Anderson Mori & Tsunematsu Clifford Chance King & Wood Mallesons Linklaters Morrison Foerster

Best Warrant Provider Based on editorial submission

Asia Pacific Summary

Best Index Provider MSCI Nikkei Qontigo SGX Solactive S&P Dow Jones Indices

Introduction

6.3 Service Providers

Manufacturer Awards

Best Educational Initiative Based on editorial submission

Most Innovative Product Based on editorial submission

Personality of the Year Based on votes in the APAC survey

Best ESG Solution Based on editorial submission

Most Innovative Index Based on editorial submission

Deal of the Year Based on editorial submission

Distributor Awards

6.4 Innovation & Education Awards

Awards Results Appendix

SRP Asia Pacific Awards Report 2021

Introduction

SRP Asia Pacific Personality of the Year 2021: Nicolas Rigois

Asia Pacific Summary

Nicolas Rigois, global head of capital market products and solutions at Standard Chartered Bank (SCB) in Singapore, has won this year’s Personality of the Year award, after securing the most votes from market participants in SRP’s Asia Pacific awards 2021 survey.

‘very strong Q1 20’ – the volume advanced another 12% in Q1 21 quarter-on-quarter.

Manufacturer Awards

“The year of 2020 was not ordinary,” he says. “The level of activity in the structured product market in Q1 20 was extremely high across the industry. Then Covid-19 hit. We recognised that the market hit the bottom in May and quickly acted on what we saw as a potential recovery.”

Distributor Awards

In Singapore, the UK bank has distributed 3,500 tranches of fixed-coupon notes (FCNs) in Q1 21 for the ‘affluent’ segment, which covers private banking as well as priority and premium retail clients. It accounted for 36.8% of those in 2020, a growth of 47% compared with the average number last year.

Awards Results

Growing up near Paris, Rigois moved to Tokyo as a trader in interest rate derivatives for Société Générale after completing his master’s degree in engineering at Mines Paribas Tech. Rigois’ career trajectory has also taken him to London. As well as SG, he has held senior positions at Credit Suisse and Barclays in London before settling in Singapore as director of private bank sales at Barclays in 2006.

Appendix

After 12 years with SCB, today Rigois leads a team of 125 bankers serving private banking and retail investors including a dozen structured product specialists in Hong Kong SAR and Singapore. Under his supervision, the total notional value of structured notes at SCB in Hong Kong SAR and Singapore rose 20% in 2020 year-on-year led by a

Running a flow business is an art Going with the flow “In a such fast and directional market, the focus was on expressing the core view and keeping implementation simple,” says Rigois, adding that flow products became SCB’s main route to the structured product market in 2020. “Running a flow business is an art,” he said. “Ultimately, the quality of underlying selection and calibration of features is key. Flow product investors are in tune with underlying market and looking for an efficient way to monetise their views and market volatility.”

SRP Asia Pacific Awards Report 2021

New trends

The internal guidelines at SCB require that any underlying asset embedded in a structured

“We’ve been an early mover to empower our salesforce to price and execute and have made some forays in offering client self-serve experiences in certain markets,” says Rigois. “We’re working towards expending to more countries and a broader range of products. For instance, SCB is offering a range of equity-linked structured deposits that client can customize and execute online in China.” Despite the increasing role of technology, sales of structured products at the UK bank are still largely driven by relationship managers and specialists as each investment needs to be “customised and positioned in a portfolio context. “I’m starting to see an increasing number of investors demanding more efficient order placement channels, which I would call ‘digitally assisted channels’ - we have started offering them in the ‘affluent’ segment,” said Rigois.

Appendix

SCB is on track to develop ESG-linked structured solutions as sustainable investing gains traction among investors after the outbreak of Covid-19. “Our ambition is to offer ESG solutions as core investments, and have integrated the ESG principles to our flow products starting from this year – they’re available to both private banking and Priority clients in Hong Kong SAR, Singapore, London and Dubai,” says Rigois.

Besides an obsession with client advisory, SCB has also invested consistently in technology which played a critical role in its transition to remote banking triggered by Covid-19.

Awards Results

“For instance, we have introduced products with lookback, outperformance features as well as products that implement rules-based investment strategies,” said Rigois.

Client approach Distributor Awards

Rigois attributes the popularity of these products to SCB’s strengths in fixed income investment as the UK bank leverages its footprint to provide onshore fixed income access to major markets in Asia, Africa and the Middle East. On the equity derivatives side, the UK bank has put the emphasis on payoffs rather than new underlyings, driven by the goal of aligning the offerings with the bank’s investment views.

Last month, the UK bank distributed an ESGlinked bonus-enhanced note tracking the Invesco Solar ETF to private banking clients in London. “Although the volumes [of ESG-linked structured products] remain limited, this strategy is starting to bear fruits,” said Rigois.

Manufacturer Awards

“BLNs have caught our clients’ attention because they combine the element of diversification normally associated with funds and the element of tenor normally associated with bonds whilst allowing a level of customisation,” he said.

product must qualify as an ESG investment and the cash proceeds generated by the issuance of the notes shall be entirely allocated by its counterparties to sustainable projects.

Asia Pacific Summary

Bond-linked notes (BLNs) also remained a focus at SCB throughout 2020 – the bank has offered quarterly tranches of this structure since Q1 20.

Introduction

Although the volumes [of ESG-linked structured products] remain limited, this strategy is starting to bear fruits

SRP Asia Pacific Awards Report 2021

7.0 Awards Results

Manufacturer Awards Best House, South Korea Credit Suisse

Best House, South & Southeast Asia UBS

Best House, Asian Equities Credit Suisse

Best House, Hong Kong SAR Credit Suisse

Best House, US Equities Goldman Sachs

Best House, Japan Barclays

Best House, Equities Citi

Distributor Awards

Asia Pacific Summary

Best House, Asia Pacific Citi

Manufacturer Awards

Introduction

7.1 Best House and Distributor Overall Winners

Best House, Taiwan Credit Suisse

Awards Results

Best Distributor, Asia Pacific Hang Seng Bank

Best Performance, South and Southeast Asia Centrum Capital

Best Performance, Asia Pacific Far Eastern International Securities

Best Capital-Protected Distributor, Asia Pacific Mirae Asset Daewoo Securities

Best Distributor, South and Southeast Asia United Overseas Bank

Best Yield Enhancement Distributor, Asia Pacific Hang Seng Bank

Appendix

SRP Asia Pacific Awards Report 2021

Service Providers

Best Law Firm King & Wood Mallesons

Best Structured Product and Derivatives Exchange Hong Kong Stock Exchange

Best Pricing & Risk Analytics Provider Bloomberg

Best Warrant Provider Société Générale

Innovation & Education Awards

Best ESG Solution ESG outperformance notes (Société Générale)

Best educational initiative Credit Suisse’s SparkTracker

Most innovative product Gold Arbitrage Note (Credit Suisse)

Personality of the Year Nicolas Rigois (Standard Chartered)

7.2 Best Sales and Performance by Region and Country

South Korea Best Distributor: Mirae Asset Daewoo Securities Best Performance: Korea Investment & Securities

Singapore Best Distributor: United Overseas Bank Best Performance: Maybank

Japan Best Distributor: Mitsubishi UFJ Morgan Stanley Securities Best Performance: Okasan Niigata Securities

Thailand Best Distributor: CIMB Thai Bank Best Performance: Leonteq Securities

Taiwan Best Distributor: DBS Best Performance: Far Eastern International Securities

India Best Distributor: Edelweiss Financial Services Best Performance: Centrum Capital

Appendix

Hong Kong Best Distributor: Hang Seng Bank Best Performance: Bank of China (Hong Kong) Awards Results

Australia Best Distributor: Citi Best Performance: Citi

Distributor Awards

Deal of the year Complex reinsurance transaction in Asia (Credit Suisse)

Manufacturer Awards

Most innovative index Man AHL TargetRisk Core Custom Index (Credit Suisse)

Asia Pacific Summary

Best issuance platform, multi-dealer FinIQ EQ Connect

Introduction

Best index provider S&P DJI

StructuredRetailProducts.com