Carlos Barrientos Comment On Regulatory Notice 22-08
Carlos Barrientos
N/A
I do not consider necessary that a client that is investing in complex products (such as a structured note) needs to have an options agreement in place due to the fact that the client is not executing options trades, it is the issuer of the product. Instead I consider that if the client understands the product (risks associated, potential return/loss, rights and limitations, liquidity, etc.) in plain English (because the client does not need to know the "specific" terms like strike, premium, etc.) and the product is suitable according to the client's investment objective, risk tolerance, portfolio exposure, etc. and is on the client's best interest it would be ok for the client to invest in such products.
It might be a good practice to get an attestation from the client that he/she understood the product, asked questions and is willing to invest in them assuming their risk.
Carlos Barrientos Comment On Regulatory Notice 22-08
I do not consider necessary that a client that is investing in complex products (such as a structured note) needs to have an options agreement in place due to the fact that the client is not executing options trades, it is the issuer of the product. Instead I consider that if the client understands the product (risks associated, potential return/loss, rights and limitations, liquidity, etc.) in plain English (because the client does not need to know the "specific" terms like strike, premium, etc.) and the product is suitable according to the client's investment objective, risk tolerance, portfolio exposure, etc. and is on the client's best interest it would be ok for the client to invest in such products.
It might be a good practice to get an attestation from the client that he/she understood the product, asked questions and is willing to invest in them assuming their risk.