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UK Structured Products Association introduces product risk ratings

UK Structured Products Association introduces product risk ratings

Today, the UK Structured Products Association (UKSPA) announces the introduction of the UKSPA Risk Ratings. The purpose of the ratings is to allow financial advisers to compare different structured products more easily and help select those that match their clients' risk profiles more closely.

The UKSPA Risk Ratings are two-dimensional, reflecting both the market risk and credit risk of a product. The market risk rating is calculated based on the volatility of the product, and ranges from 1 - 7 (similar to the SRRI rating commonly used by the fund industry). The credit risk rating is based on the credit rating of the issuer or deposit taker of the product, and ranges from A - G.

The ratings have been designed for use by financial advisers only and made available via UKSPA members' websites.

Zak De Mariveles, Chairman of UKSPA, comments: "Up until now, whilst our members are very clear at describing key risks in their product literature, there has been no alphanumeric risk value assigned to each product such as is available within the funds industry. The introduction of the UKSPA Risk Ratings is therefore a landmark development in the market. These ratings not only give advisers the tools they need to be able to match products more closely to their clients needs, but they demonstrate the high levels of transparency that our members are committed to providing."

More information on the UKSPA Risk Ratings, including a guide on how they are calculated is available here.

Download the full PDF here.

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Representing the collective interests of leading structured product manufacturers in the UK

The UK Structured Products Association ('UKSPA') is a membership organisation established by the leading manufacturers of structured products in the UK. UKSPA provides a unified voice for its members, working with regulators, financial advisers and other trade bodies. It serves a number of important functions, including engaging with regulators, developing best practice guidelines, educating the investment community and providing a useful source of information for manufacturers, financial advisers and retail investors within the UK.

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