The Securities and Futures Commission (SFC) today released a new Survey on the Sale of Non-exchange Traded Investment Products based on responses to a questionnaire sent to 1,465 licensed corporations (Note 1). The survey showed that 213 licensed corporations engaged in the sale of investment products with an aggregate transaction amount of $468 billion (Note 2) during the 12-month period ended 31 March 2014.
The SFC conducted the survey to understand the overall market structure and to obtain an overview of the types and value of investment products sold by the corporations it licenses. This information helps the SFC supervise the selling practices of licensed corporations.
The survey results showed that the top 10 firms in terms of transaction amount accounted for 79% of total sales and they also acted as major product issuers. One financial conglomerate, which only served non-retail clients, accounted for a major share of the aggregate transaction amount.
Compared with the SFC’s previous survey conducted in 2012, the aggregate transaction amount reported in this year’s survey declined about 8%, from $510 billion to $468 billion. This was mainly due to two international financial conglomerates switching sales of investment products from licensed corporations to banking entities.
This year’s findings also showed an upward trend in the sale of non-investment grade corporate bonds, which suggested that individual investors were looking for higher returns in a low interest rate environment.
Notes:
- The response rate was 98%.
- The transaction amount refers to the amount paid or payable by investors for investment products. For leveraged products, the transaction amount represents the maximum exposure of contracts. In this survey, licensed corporations were requested to report only one-sided transactions. Transaction amounts of rollover, redemption, and close-out positions were excluded.