Finra Examines CDs Tied to Derivatives as Sales Surge to Record
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The Financial Industry Regulatory Authority is examining sales of certificates of deposit tied to derivatives after banks sold a record number of the investments last year.
The industry-backed regulator wants to make sure the so-called structured CDs, where principal is protected by the Federal Deposit Insurance Corp., are properly understood by investors given their increasing complexity and lengthening maturities, said Maria Rabinovich, a lawyer in Finra’s risk division. Rabinovich, who spoke yesterday after a session on structured product law and regulation at Morrison & Foerster LLP’s office in New York, declined to comment further.