Structured Products Americas: greater industry co-operation needed

Kevin Mahon, Florida-based senior vice-president at Countrywide Securities, has called upon the US structured products industry to work more closely together to provide greater transparency for investors. “Dealers need to clarify in plain English what a structured product is, what they’re going to call it, and how they’re going to sell it,” he said, while speaking on a panel at the Structured Products Americas conference in Coral Gables, Florida.

Calling for an industry-wide nomenclature to be established, he pointed to reverse convertible notes as an example of confusing discrepancies. A reverse convertible note is a medium-term note linked to a single stock or a basket of stocks. A typical tenor is one-year and the products are often offered with some amount of principal protection. But different dealers call the same products different names, such as Revertibles, Rex’s and Recons.

John Radtke, an executive director at Incapital, a