UK Structured Products Association
The UK Structured Products Association ('UKSPA') is a membership organisation established by the leading manufacturers of structured products in the UK. Established in 2009, UKSPA has grown to 14 members today, representing a significant majority of the issuers and firms active in the UK structured products market.
UKSPA is not a commercial organisation. The Association provides a unified voice for the industry and its members, serving a number of important functions including engaging with regulators, developing best practice guidelines, educating the investment community and providing a useful source of research and information for financial advisers.
UKSPA engages with the media and communicates objective and factual information about structured products. It does not promote individual firms or products. The Association provides a voice in the media for the industry, offering research to demonstrate structured products value and promoting greater understanding of the investments.
UKSPA has created Product Codes, broken down into four main sectors: Protected, Non-Protected, Growth and Income, as a reference guide to help advisers and investors understand what the different types of product are and their key features. The codes appear on member firms’ product brochures.
In addition, the Association has created Risk Ratings for structured products, to provide a uniform and meaningful indication of the overall risk profile of products, taking account of both market risk (ratings rank between 1- 7) and credit risk (ratings rank between A – G), to assist advisers and investors in comparing structured products.
The Association is also now producing indices that offer performance analysis of the industry’s products, broken down with reference to its Product Codes.
UKSPA Product Codes
UKSPA has created Product Codes, broken down into four main sectors:
Protected Income: This sector includes products that offer a potential income stream during the term of the product, plus full repayment of capital upon maturity (subject to counterparty risk).
Non-Protected Income: This sector includes products that offer a potential income stream during the term of the product. Capital is at risk at maturity if the Underlying closes below a certain level. Because of the additional risk to capital, the potential income on offer from Non-Protected Income products should be greater than that from Protected Income products.
Protected Growth: This sector includes products that offer a potential growth return to be paid when the product matures along with the repayment of capital in full (subject to counterparty risk).
Non-Protected Growth: This sector includes products that offer a potential return at maturity, depending on the performance of the Underlying. Capital is at risk at maturity if the Underlying closes below a certain level. Because of the additional risk to capital, the potential return on offer from Non-Protected Growth products should be greater than that from Protected Growth products.
The UKSPA Product Codes are intended to help advisers and investors understand what the different types of product are and their key features. The Product Code numbers can be found on UKSPA members' product brochures.
UKSPA Performance Indices
UKSPA has created performance indices that are published on a monthly basis, covering all qualifying products as well as a breakdown by different sectors, product types and risk ratings.
As well as showing the historical performance levels for each index, UKSPA also show the number of qualifying products included in the performance index at each historical point.
The purpose of the performance indices is to provide a useful benchmark to how different types of structured products have performed historically, with data that can be compared to the historical performance of other investment types and benchmark indices.
UKSPA also publishes regular commentary alongside the performance indices, to help advisers and market commentators analyse and apply the data for their own purposes.