Law firm Reed Smith’s derivatives team has advised ETF Securities on its new 3x Short and Leveraged Equity Securities ETP Platform.
This is one of the first new structured derivatives products to go through the revised UKLA retail prospectus approval process.
Reed Smith’s team was led by partner Chris Borg and included partner Brett Hillis, associate James Fisher, with support from London tax partner Caspar Fox, US exchange-traded fund partner Tom Conner and French tax partner Sophie Borenstein.
Borg says: “Structured derivatives always throw up their own challenges. But as retail investors can buy and sell ETPs, the regulatory considerations give you another major angle to cover. This is particularly so, when dealing with the UKLA’s retail comprehensibility standards. The concept at the heart of these products is simple, but bringing that simplicity out in a retail prospectus is not always straightforward, because there’s a lot of moving parts under the bonnet. You have to strike the right balance.”
Hillis adds: “A few years ago credit risk was the main issue on people’s minds, now they’re also focusing on uncertainty around future regulatory and tax regimes. Reed Smith fielded an experienced team of derivatives, regulatory and tax specialists which was ideally equipped to address these issues. Our team has a long history in the development of the ETP market.”
