As regulators have scrutinised structured products over the past few years, exchange-traded funds have managed to stay under the radar. However, with the G-20’s Financial Stability Board raising concerns about ETFs, this situation looks set to change.

New regulations, specifically the push towards central counterparty clearing, are having a huge impact on banks' over-the-counter foreign exchange operations. As the banking sector undergoes significant changes, what will this mean for banks' organisational structures and the foreign exchange market?

The introduction of mandatory clearing for over-the-counter derivatives will bring with it a widescale, and costly, post-trade infrastructural reorganisation and a host of new considerations for the industry.

Banks are using volatility products with transparent structures and pay-offs that are easy to understand to attract a growing number of institutional and individual investors.

In theory, the advent of the Ucits IV Directive should lead to standardised documentation for structured products across the EU. In practice, structurers must still work with diverging national regulatory frameworks.

Joe Cassidy, Deutsche Bank’s global head of prime rates brokerage and clearing, considers how the over-the-counter derivative landscape is evolving and what market participants can do to prepare for the changes.

The advent of Solvency II and Basel III means insurers are reconsidering where to invest, just as banks are looking for new sources of funding. Structurers are seeking ways to play these mutual interests.

The German structured products market is growing steadily again and providers are involved in an intense battle for market share.

Investors are nervous about inflation, and structured products providers are reporting steady demand for returns linked to interest and inflation rates, as well as traditional defensive plays using commodities prices.

With inflation eroding real returns, investors are ready to take on greater equity market risk. But only if other risks can be excluded from the mix.