Contineo rolls-out new data service for structured products
http://structuredretailproducts.com/news-story/23067/contineo-rolls-out-new-data-service-for-structured-products
ABOUT CONTINEO
Contineo is the first industry supported open messaging network and community to access issuers of structured products. From best price discovery to order fulfilment, our subscribers benefit from unique data analytics through a comprehensive global network.
Contineo is proud to count the world’s leading private and investment banks as subscribers. To learn more and see a demo please visit www.contineo.link or contact info@contineo.com.hk.
Structured Retail Products: Contineo eyes Europe for next stage of development
That’s how the market works and different players have different interests and issues to address in specific markets. We have just gone live and we are still building the platform, but we are confident and have the capital to eventually launch in Europe. We have already had interest from a number of issuers active in Europe. We want to build a robust service in the Asia-Pacific region and leverage our capabilities to grow organically, while also seeking opportunities and partners.
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.
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“[Julius Baer] will benefit from this industry backed initiative, as it aims to enhance the execution of equity-linked structured products in the Asia-Pacific region,” said Roger Meier, head of structured products sales Asia at Julius Baer.
The Hong Kong-based open messaging and price discovery platform expects to bring onboard a number of issuers and private banks before the end of the year, according to Mark Muñoz, managing director of the multi-dealer platform.
“We have been operating for a little more than a month and the response from issuers showing interest has surpassed our expectations,” said Muñoz. “We have a huge amount of momentum because on one side private banks are interested in standardising the market and on the other hand issuers are interested in lowering their costs.”
The biggest challenge for Contineo is to make sure there is a clear understanding of what private banks need and for this purpose the firm has formed an advisory committee, said Muñoz.
Contineo is in talks with five technology firms servicing the Asia Pacific wealth management market to capitalise on the connectivity they have to add value to what they are offering and lower operating costs including infrastructure management and maintenance faced by issuers when dealing with multiple private banking technology interfaces, said Muñoz.
“From the outset, Contineo was launched to be a platform open to other third parties, not just from an issuer perspective, but also from a technology perspective,” said Muñoz. “Contineo’s aim is to provide a transparent platform where third parties can connect to access structured products.”
“There are a number of tech providers out there that offer pre-and post-trade processing services, and we want to make sure we can connect those vendors that offer full back-to-front solutions service in one place.”
The new platform will continue to add functionalities beyond price discovery, said Muñoz. “We don’t want to limit this to a few issuers, private banks and tech platforms,” he said. “This is not about connecting issuers but about building a community.”
Contineo, which is backed by a consortium of banks including JP Morgan, Goldman Sachs, HSBC, Barclays, BNP Paribas and Société Générale, and technology firm AG Delta, was launched in January to provide greater access to equity-linked structured products for private banking and wealth management firms.
Contineo supports messaging for equity-linked notes, including knock-out equity linked notes, accumulators/decumulators, fixed coupon notes, daily range accrual notes, and over the counter products through a single API connection for Hong Kong and, more recently, the US, Singapore and Japan.
by Pablo Conde
www.structuredretailproducts.com
Structured Retail Products: Banks Launch Contineo Multi-issuer Platform in Asia Pacific
Singapore-based technology firm AG Delta will provide the technology infrastructure of the platform, which is expected to go live early this year once the process of registration of private banks and connectivity to issuers has been completed.
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