SEC Warns Investors about Principal Protected Notes
Posted by William Byrnes on November 3, 2011
In a low-interest rate world, high-yield investments offering principal protection are enticing to investors. But the complexity of some high-end investment products has the Financial Industry Regulatory Authority (FINRA) and Securities and Exchange Commission’s (SEC) warning investors to look before they leap.
In an alert titled Structured Notes with Principal Protection: Note the Terms of Your Investment, the regulators warn investors that these structured products may not be what they seem. Although they are marketed under a variety of names with a “principal protection” component—e.g. “absolute return” and “minimum return”—the true extent of their safety is never obvious . Investors need to read the fine print to decide whether they are suitable for their investing needs and risk tolerance.
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This entry was posted on November 3, 2011 at 06:00 and is filed under Wealth Management. Tagged: Business, Financial Industry Regulatory Authority, FINRA, Investor, SEC, Securities and Exchange Commission, Structured product, U.S. Securities and Exchange Commission. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.