Leonteq is announcing the introduction of its ETP+ label, which is designed to provide enhanced safety for investors. The company is also launching its first exchange traded product (ETP) linked to the FuW Swiss 50 Index NTR under the new label.
Leonteq is unveiling the ETP+ label, which offers distinct innovations for the ETP market in Switzerland. ETP+ uses not only a reputable custodian and collateral agent, both based in Switzerland, but also provides for daily independent checks, which serve as key mitigators of the issuer risk. In combination with Leonteq as an issuer that is a regulated securities firm with an investment grade rating and a strong capital position, this new setup offers a compelling differentiation to existing ETP providers.
Collateralization to safeguard investor interests
Leonteq is partnering with SIX to reduce issuer credit risk and to protect ETP+ investors’ interests by collateralizing any ETP+ liabilities over the product lifecycle. Under this arrangement, collateral is held at SIX SIS AG, and SIX Repo AG, in its function as collateral agent, is responsible for daily inspections of the collateral. The collateralization technique used for ETP+ is based on an established framework with SIX that has been in place since 2012.
Nerin Demir, Head Repo & Collateral Management at SIX said: “We are pleased to support the ETP segment with our Triparty Collateral Management solution. Our service meets the highest standards of security and offers additional investor protection. Leonteq is a very active and long-standing user of our collateral management service and we are looking forward to deepening the cooperation with their first ETP issuance on SIX Swiss Exchange.”
First ETP issuer licensed as securities firm by FINMA
Leonteq, is the first issuer of ETP products in the Swiss market which is licensed as a securities firm by FINMA. Furthermore, the company has an investment grade rating assigned by Fitch Ratings Ltd., a strong capital base totalling around CHF 890 million, and a proven track record spanning more than 15 years. Thus, Leonteq differentiates from existing ETP issuers which tend to be special purpose vehicles without a proven track record, rating or regulatory supervision and only with minimum paid-in capital.
Alessandro Ricci, Head Investment Solutions of Leonteq stated: “We are pleased to launch the ETP+ label in Switzerland, demonstrating our innovative strength as a leading provider of investment solutions. With SIX, investors can rely on a reputable Swiss-based counterparty and be assured that their investment is safeguarded.”
ETP+ on the FuW Swiss 50 Index NTR
In this context, Leonteq is launching its first ETP+ on the FuW Swiss 50 Index NTR developed by the editorial team of Finanz und Wirtschaft (FuW). With the FuW Swiss 50 Index NTR, which includes the top 50 tradable Swiss companies, investors have access to an appropriate representation of the Swiss equity market. Every six months, the companies in the index are selected according to their free float market capitalization and considering minimum liquidity requirements. The top 25 companies are double-weighted, while the remaining 25 companies are single-weighted, resulting in a broader diversification compared to market capitalization weighted indices. The index is a net total return index, meaning that net dividends are automatically reinvested. The ETP+ on the FuW Swiss 50 Index NTR is listed on SIX Swiss Exchange and is available to Swiss retail and institutional investors with a minimum investment amount of CHF 26. Further, the ETP on the FuW Swiss 50 Index NTR is currently the only equity based listed ETP at SIX Swiss Exchange.
Alessandro Ricci, further said: “We are excited to expand our successful collaboration with Finanz und Wirtschaft, a leading financial newspaper in Switzerland. The first ETP+ issued by Leonteq in cooperation with FuW is an authentic ‘made in Switzerland’ product, giving investors access to an attractive offering with exposure to the Swiss equity market.”
Learn more about the first ETP+ linked to the FuW Swiss 50 Index NTR.
