What regulations must be observed when issuing structured products?

In California, structured products are regulated by the Alternative Investment Law. Structured products are investments that can include derivatives, receivables, and other complex securities. When issuing structured products, there are a variety of regulations that must be observed. First, all structured products must be registered with the California Department of Corporations. This is done both for the purpose of providing transparency to investors and to ensure compliance with California’s securities laws. Structured products must also provide clear, accurate disclosure regarding the risks associated with the products as well as any fees that may be charged to investors. Investors must be made aware of the major risks and costs associated with the investment before they make a decision to invest. Finally, structured product issuers must comply with anti-fraud provisions. These provisions prohibit the dissemination of false or misleading information, or the omission of material information, to potential investors. In sum, when issuing structured products, the Alternative Investment Law requires that issuers register their products, provide clear and accurate disclosure, and comply with fraud provisions to ensure that investors are given the information they need to make an informed decision.

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What regulations must be observed when issuing structured products?

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