Month: August 2015

The bank is also a vocal cheerleader of the Contineo initiative, an industry-supported multi-issuer platform for equity-linked structured products. Contineo went live on January 20 with the industry’s first open messaging network, designed to act as a high-speed conduit between issuers and their private banking and wealth management distributors. HSBC was one of the seven founding backers.

Pantone says: “Automation will allow the Asia structured product industry to grow and evolve and we expect Contineo to play a big role. Contineo has an experienced management team, best-in-class technology and the backing of the leading derivatives providers in the region. We are excited to be part of it.”

Read more at Risk.net.

Mark Munoz, managing director of Contineo, discusses the multi-issuer platform’s future move into Europe and its aggressive expansion plans in Asia.

The competitive atmosphere in Asia’s structured products market has ramped up after the June launch of multi-issuer platform (MIP) Contineo. Managing director, Mark Munoz, says the platform – backed by six big investment banks – has the drive to attain a dominant position, as it squares up against established players such as Vontobel and FinIQ.

Read more at Risk.net

Competition is healthy and good for the market and investors, and it serves the sell- and buy-side, particularly the latter, which can benefit from a model that will significantly reduce operational costs. Competition is driven by the demand for access and transparency as well as better information. In that sense, Contineo is well positioned and has a distinct advantage. We are not burdened by any legacy systems or ‘single-to-single’ or ‘point-to-point’ connections; and we are not an issuer, so we don’t have any bias around where we direct our network. Our focus is around providing connectivity and access to data.

Who will come out as winners in multi-dealer platforms? What do you need to offer to make Contineo a preferred partner?
Our approach to standards and data will be a game changer over the next year. Connectivity is very important to get a critical mass of products and transactions, but we see even more value in providing information to the banks on a number of different levels (such as operational or compliance).

What’s next?
Our focus for the next three to six months is on-boarding private banks and new issuers and our pipeline is full. What we offer is different from other platforms. Contineo has been built on a $1m+ infrastructure and had to go through the IT and compliance departments of six different investment banks as well as multiple private banks, which gives an idea of our scale compared with others. If you can manage and address the significant networking security requirements banks have that puts us in a very good place for expansion.

Contineo is backed by foreign banks operating in the Asia Pacific. Is that an issue in any way? Is it important to have some sort of a local profile to be successful in the region?
What is important for us is the liquidity that passes through the network as well as the balance sheets of our backers. That’s what makes Contineo attractive to the buy-side, and sets it apart. Our strength is in our capital and the commitment and obligation we have from our subscribers.

What other factors make you an appealing partner? What’s your forecast for the next few months and next year?
The focus is to deliver for private banks, and the key is not only about providing access but about providing a good service. We are not interested in adding bells and whistles but about providing a solid infrastructure to add value to our users. Our platform cannot be built overnight and needs careful planning. This is not a standard start-up as it is backed by six banks and is on-boarding a number of private banks. This is important as the kind of investment to set up this platform is not something that banks would take lightly. Contineo is future-proof and has the commitment of a consortium that has signed multi-year contracts which is something that other platforms don’t have. We are the best capitalised of all the platforms, we are building an extensive pool of users, and we have the right infrastructure and set-up to respond to any challenges the market throws at us.

Do you think multi-issuer platforms will eventually replace the reverse inquiry model?
We are already seeing that trend. It might not replace that model completely but we are already getting requests for big tickets, and it’s something we would be able to accommodate. Conversations and requests over the phone will always be there, but we see multi-issuer platforms taking a chunk of that pot as the efficiency of the process will outweigh any issues related to the size of the transaction. The use of technology also allows us to add new features to speed up communication, and this will benefit the sell and the buy-sides equally and will streamline the bringing products to the market.

What developments should we expect at a product level?
We are working very closely with our partner banks to introduce new asset classes in a standardised way. Demand for foreign exchange products is high in the region and we can provide added value around those products. We will continue to respond to demand and build the platform by addressing the needs of our clients.

Contineo launched in January 29, 2015 as the industry’s first open messaging network to provide private banking and wealth management firms with greater access to equity-linked structured products. The platform has backing from a consortium comprising technology firm AG Delta and six investment banks – Barclays, BNP Paribas, Goldman Sachs, HSBC, JP Morgan and Societe Generale.