Structured product risk for Swiss quoted products will now be reviewed weekly, according to an announcement from the Swiss Structured Products Association, a move highlighting efforts by the industry to keep a closer oversight on this sector.

Structured products listed in Switzerland fall into six risk categories – from 1, for low risk, to 6 for the highest risk category. The SSPA assigns each structured product a Risk Rating based on its risk category.

The move comes at a time when the structured products industry, while it has seen a revival in performance and the launch of new vehicles, is still coming to grips with some of the issues thrown up by the financial markets turmoil of the past two years.

With the introduction of such risk data and ratings, the SSPA has sought to render structured products more transparent for investors and other market participants.

“We are proud to report that SSPA’s Risk Ratings have become the accepted risk factor assessment standard for structured products,” says SSPA president Roger Studer.

SSPA’s Risk Commission determines dynamic risk rating threshold values and regularly monitors and corrects intervals for the six risk categories as needed. “That way, structured products’ Risk Ratings remain correct in relation to each other,” according to SSPA vice-president Paolo Vanini.

According to the SSPA, the parameters for each risk category are derived from a series of benchmark indices. Benchmark index Value-at-Risk figures are calculated weekly and the six risk categories automatically adjusted accordingly. The Risk Commission is also allowed to take ad hoc action in the case of extreme events that may have an impact on systemic risk.