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OPAL, the UK’s largest provider of structured product administration to investment companies, banks, building societies and other third parties, predicts that, despite the high profile issues in 2009, the market will continue to grow by 20 percent in 2010.
In 2008 the structured product market grew by almost 25% in the UK, up from £7.8bn in 2007, to almost £10bn in 2008, with 2009 still on target for a record year.
OPAL, which has been in operation for 25 years and currently services over 700,000 financial services contracts of varying types, including structured products, onshore bonds and a range of protection contracts, expects the demand to come from organisations that are looking for very benign, FSCS protected products.
OPAL also predicts that there will be a move to create a new classification for ‘no risk’ / guaranteed products such that they do not become tainted by some of the more esoteric structures, more commonly associated with structured products.
Tony Collins, managing director, OPAL, comments: “2009 has been a turbulent year, but despite this, many companies see the benefits that a specific type of structured product can offer. I personally welcome the closer review by the FSA as this will help to create stability in the market and, more importantly, give companies the confidence to launch what are really compelling products. Returns of above 5 per cent, capital protection and protection under the FSCS give the market a healthy future.”
