Finra open to projections in structured products
Banks in the US have shied away from using projections to forecast the probability of certain payouts. But attendees at the Structured Products Washington conference heard that useful information about what may happen in the future should be welcomed. Richard Jory reports
The Financial Industry Regulatory Authority (Finra) is as interested in exploring the use of projections to determine the probable performance of a structured product as it is against the use of backtesting. "Finra does not typically allow projections of performance, but the very conservative approach to the notion of projections is a bit outdated," says Thomas Selman, executive vice-president, regulatory policy and legal compliance officer at Finra, speaking on a panel at the Structured
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