The issuance and lifecycle management of structured products is a critical aspect of financial engineering and investment banking, encompassing a broad range of activities from product conception to maturity.
Once structured products are issued, the event and lifecycle management phase becomes critical to their success and alignment with investor expectations. This phase encompasses a series of activities designed to ensure that the products operate as intended, adjust to market dynamics, comply with regulatory requirements, and meet investors' financial goals.
Here, Framesoft Event & Lifecycle Management (FEM) takes center stage.
Continuous Monitoring & Adjustment
1. Market & Credit Risk Assessment
Ongoing evaluation of market conditions and credit risk factors that may impact the underlying assets of structured products, enabling timely adjustments to strategies.
2. Performance Tracking
Regular monitoring of the product's performance against benchmarks and expectations, including valuation and the impact of market movements on pricing.
Corporate Actions and Events Handling
1. Corporate Actions Management
Efficient handling of corporate actions (e.g., dividends, splits) affecting the underlying assets, ensuring adjustments are made in line with the product's terms.
2. Event-Triggered Actions
Managing events like knock-in / knock-out triggers, barrier breaches, or coupon payments, including the calculation and execution of these event-triggered actions.
Regulatory Compliance and Reporting
1. Compliance Monitoring
Ensuring the product remains in compliance with changing regulatory requirements throughout its lifecycle.
2. Investor Reporting
Providing regular, transparent reports to investors regarding performance, risk factors, and significant events impacting the product.
Investor Communications
1. Event Notifications
Promptly informing investors about significant events affecting the product, such as maturity approaches, option exercises, or market-related adjustments.
2. Query Handling
Offering robust support for investor inquiries related to the product's performance, events, or terms.
Maturity and Redemption Processes
1. Maturity Management
Efficient management of the product's approach to maturity, including the calculation of final payouts and the execution of redemption processes.
2. Early Redemption Handling
Managing optional or mandatory early redemption events, including the calculation of payouts and communication with investors.
Infrastructure
Event & Lifecycle Management requires robust data management capabilities to manage vast amounts of information and analytics tools for performance tracking and risk assessment. Furthermore, data management functions to manage vast amounts of information and analytics tools for performance tracking and risk assessment. These features are incorporated via Framesoft Data Insight (FDI) integration.
Conclusion
Effective event and lifecycle management is crucial for success and integrity of issued structured products. By meticulously overseeing these products through their entire lifecycle, from issuance to maturity, issuers can safeguard their value, ensure compliance with regulatory standards, and fulfil the financial objectives of their investors. This management framework requires a sophisticated solution to navigate the complexities of structured products in dynamic market environments.
Framesoft Event & Lifecycle Management (FEM) is integrated in Framesoft Structured Products (FSP) extending its scope as illustrated above.
Get in contact with us for a FSP & FEM demonstration at