What is a Certificate?

A CertificateThe Certificates are securitized financial instrument derivatives linked to the performance of an Underlying, whether, for example, shares, a stock index, a currency, a commodity or an interest rate. The Certificate are traded both on the SeDeX of the Italian Stock Exchange as well as on the EuroTL X multilateral trading facility. is a financial instrument issued by a financial intermediary that allows the investor to take a position on an underlyingThe Underlying asset is the activity such as a share, stock index currency, commodity or any other real( e.g. raw materials) or financial asset( an exchange rate or interest rate) upon which the value and price of the Certificate is dependent. financial asset, such as sharesTitle document showing the minimum stake of a shareholder in the share capital of a company that entitles the holder or the Shareholder, to receive a part of the profits eventually distributed by the company and which can confer the right to vote at the shareholders meetings. There are different types of shareholdings depending on the company incorporation and these can be: ordinary, preference or savings., a stock index, a currencyThe currency is the money the value of a security is expressed in. The term Currency is used to mean the currency in circulation in a given country and which can be taken as a Reference Currency for securities issued in that country. In the banking terms, currency represents the day interest on a certain sum begins to accrue., a commodityThe term commodity essentially indicates a basic good such as, for example, metals, minerals, agriculture and livestock and other physical assets, on which investors can trade through the use of derivatives. or an interest rateThe interest rate measures the cost of a financing transaction and represents the compensation paid to the bank for the loan of a certain amount of money. It is expressed as a percentage and with reference to the year..

The obligation of payment flows due to the holder of the CertificateThe Certificates are securitized financial instrument derivatives linked to the performance of an Underlying, whether, for example, shares, a stock index, a currency, a commodity or an interest rate. The Certificate are traded both on the SeDeX of the Italian Stock Exchange as well as on the EuroTL X multilateral trading facility. is paid for by the issuing financial institution, which details the specific characteristics of each financial instrument in the appropriate information prospectusA prospectus is a document containing information about the nature of the financial instrument and the risks associated with an investment. The Prospectus is drafted and published by the Issuer who intends to carry out activities and promote public participation in an investment. edited at the time of issue.

By virtue of the multiplicity of payoffs offered by the different types of CertificateThe Certificates are securitized financial instrument derivatives linked to the performance of an Underlying, whether, for example, shares, a stock index, a currency, a commodity or an interest rate. The Certificate are traded both on the SeDeX of the Italian Stock Exchange as well as on the EuroTL X multilateral trading facility., these financial instruments respond to the different risk/reward requirements of investors.

Depending on its features, the CertificateThe Certificates are securitized financial instrument derivatives linked to the performance of an Underlying, whether, for example, shares, a stock index, a currency, a commodity or an interest rate. The Certificate are traded both on the SeDeX of the Italian Stock Exchange as well as on the EuroTL X multilateral trading facility. allows investments to be made on different time horizons and on different market views: it is possible to find suitable Certificates with upward, downward or lateral prospects of values for a wide range of underlying financial assetsThe real or financial asset on which the price of another financial instrument is derived. on which they are issued.

This allows the investor to achieve financial solutions suitable to meet his own requirements and an adequate risk-returnThe Return on investment is the change in total percentage of the value of a financial instrument at a given time frame. profile.

Depending on the characteristics of the type of instrument, Certificates also allow for the development of strategies designed to benefit from rises and falls, even moderate ones, in the underlyingThe Underlying asset is the activity such as a share, stock index currency, commodity or any other real( e.g. raw materials) or financial asset( an exchange rate or interest rate) upon which the value and price of the Certificate is dependent. financial asset and from markets characterised by phases with substantial lateral movements.

Through the use of Certificates, investors are able to develop strategies to optimise the overall risk of their portfolio through the geographic and sector diversification offered by the wide range of underlying financial assetsThe real or financial asset on which the price of another financial instrument is derived..

As they are instruments issued by a financial intermediary, Certificates expose the investor to the issuers' risk, that is to say the risk linked to the issuer's ability to fulfill its obligations.


Classification

Depending on the investors attitude to risk tolerance, Certificates also allow for different types of capital protectionThe term protection means the minimum percentage of invested capital that is returned at maturity.: from those which do not guarantee protectionThe term protection means the minimum percentage of invested capital that is returned at maturity. to those that ensure partial or conditional protectionThe term protection means the minimum percentage of invested capital that is returned at maturity. if  certain parameters  - established at the time the CertificateThe Certificates are securitized financial instrument derivatives linked to the performance of an Underlying, whether, for example, shares, a stock index, a currency, a commodity or an interest rate. The Certificate are traded both on the SeDeX of the Italian Stock Exchange as well as on the EuroTL X multilateral trading facility. was issued - are met, and also including those generally suitable for investors with a preference for low risk investments which guarantee total capital protectionThe term protection means the minimum percentage of invested capital that is returned at maturity..

ACEPIThe Italian Association of Certificates and Investment Products. Founded in 2007, with the aim of promoting interest and knowledge of Certificates and investment products with savers and encourage the development of efficient and transparent markets for such products., the Italian Association of Certificates and Investment Products places Certificates into four categories depending on their specific characteristics and the level of capital protectionThe term protection means the minimum percentage of invested capital that is returned at maturity. offered to the investor.  These are: Leverage Certificates, Capital Protected CertificatesCapital protected Certificates are financial instruments that offer the opportunity to invest upward or downward on the underlying financial assets ensuring investor protection at maturity of all or part of the issue price of the Certificate. The level of protection is established in the issue phase., Conditional Capital Protected CertificatesConditional Capital Protected Certificates are financial instruments that allow investors exposure to the upside or downside of the underlying financial asset with the protection of the issue price of the Certificate contingent upon the underlying financial asset: the loss of capital protection occurs when the value of the underlying asset exceeds a certain value, called the Barrier Level. and Non Capital Protected CertificatesNon Capital Protected Certificates are financial instruments that follow the dynamic evolution of the value of the underlying financial asset. Depending on the type of Certificate, investors may benefit from the rising or falling movements of the underlying asset. The investor is exposed to the lack of capital protection, in the same way as a direct investment would be in the underlying asset. The movements of the underlying asset may be increased or reduced by the Certificate where a participation factor other than 100% is expected..

 

 

Types of products

imageCapital Protected Certificates

Capital protected certificates are financial instruments that offer the opportunity to invest in the underlying assets guaranteeing the protection of all or part of the capital invested, if underwritten at the placement stage and if held until maturity.
  • Discover more

    Equity Protection

    In the Long or Short versions of these certificates, the first allows you to participate in upward movement of the underlying financial asset and the second in the downward movement, while protecting the issue price or a percentage of it to maturity.

  • Discover more

    Digital

    Allows for the receipt of a regular income if at the evaluation date the underlying share is at a level equal to or higher than the initial evaluation, protecting the capital or part of it on maturity.

imageConditional Capital Protected Certificates

Conditional Capital Protected Certificates are financial instruments that allow you to participate in the movement of the underlying financial assets, providing a partial guarantee of capital, subject to the non-achievement of certain barrier levels established at the time of issue.
  • Discover more

    Bonus

    This type of Certificate allows you to participate in the upward (or downward) movement of the underlying asset, while providing additional income as long as the underlying asset does not reach the barrier level.

  • Discover more

    Express

    Express Certificates have the peculiarity of being able to expire prematurely returning the issue price plus a premium if on one of the predetermined dates the underlying asset is higher than or equal to a predetermined level.

  • Discover more

    Twin Win / One Win

    Participation in the upward and downward movement of the underlying asset at maturity, subject to the presence of a barrier level which if breached provides less capital protection for the certificate.

  • Discover more

    Accelerator

    A product that participated in the upward or downward movement of an underlying financial asset. The main feature of this certificate is the proportional replication of the underlying trend, as well as the presence of an AirBag which attenuates losses in the event of downward movement.

  • Discover more

    Credit Linked

    A product offering the opportunity to achieve regular premiums which are conditional on the state of "non-default" of one or more reference entities.

  • Discover more

    Digital

    Provides a regular income if at the evaluation dates, the underlying asset is at a level equal to or higher than that of initial evaluation. The capital protection is conditional upon failure to reach the barrier level.

  • Discover more

    Premium Certificate

    Premium Certificates pay fixed premiums over the life of the instrument regardless of the performance of the underlying asset. At maturity, the capital protection is conditional upon failure to reach the barrier level.

  • Discover more

    Cash Collect

    Cash Collects reward the investor with fixed premiums for a number of months during the life of the certificate. In addition it pays extra premiums for the following months if the value of the underlying asset is equal or above the barrier level. At maturity, the capital protection is conditional upon failure to reach the barrier level.

imageNon Capital Protected Certificates

The certificates without capital protection are products that replicate the performance trends in the values of the underlying assets. Some products provide for participation in the underlying movements proportionally. 
  • Discover more

    Benchmark

    They replicate, upwards or downwards performance of the underlying financial asset without having a leverage effect.

Text modified: 10.04.2017