Structured Note Issuance Business - Best Practices
Posted: June 13th, 2013, 6:53 am
Hello Folks,I work for a KPO which consults BBs on various issues. My client is a one of the largest investment banks. I have been tasked with finding out the best practices for their Structured Note issuance business. I know best practices is a vague and subjective term but probably its an euphemism to find out where they are with respect to the competition. I would like to hear from you guys about some of the following issues.1. How is the business organized? - By this I mean is there a separate Structured Notes Issuance group who specifically handles structured products of all asset classes more like a packaging group or does each Asset class desk have their own structuring guys? Or is there any other model which some of the banks might follow? I would also get your expert opinion on which is the way best way to organize this business, pros and cons of each approach etc. 2. How good are the IT systems for this Business in your bank?The client I am working with the IT systems is a complex web of systems. Each asset class has their own Trade Booking systems and own risk systems. So from a structured note point of view its a mess to book different components of the issuance in different systems maunally. How is it in your respective banks? Is there enough STP and automation such that business is easily scalable or you too are inflicted with too much manual booking and data double entry?3. How is the customer mix in your respective banks? Is it more retail oriented or serving more institutional clients? Does it have a Request for Quote kind of a platform where retail investors can login and buy products? How do you see this mix evolving in the future. Is it worth investing in building such an end to end platform where people can buy a structured product with a single click?4. How do you see the new regulations like Basel 2 and Dodd Frank act impacting this business?For example in UK they have adopted the Retail Distribution Review regulation which has impacted the business. Under the new regulationg environment do you see this business flourishing or slowing down? Will this change the mix of customers?The above are some of the questions I could think of which are key, please feel free to give your opinion about any other important issues I might have missed out. Greatly appreciate any insight you could provide. Thanks in advance.C-22.