Talk:Structured product

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The opening paragraph states that structured products are "synthetic" instruments. The way the industry uses the term, synthetic typically implies a credit derivative, which may or may not be the case for structured products. For examples, an agency CMO is an example of a structured product but is "cash" product, but not synthetic. A CDO may be cash (owning the cash bond which form the assets of the CDO) or synthetic (consisting of credit derivatives on the underliers).

I would respectfully suggest that word "synthetic" be eliminated The word "derivative" would also be confusing, for similar reasons--it implies a swap contract. In addition, "CMO derivatives" typically refer to specific types of CMO tranches, such as inverse floaters.

I understand the intent of the usage of the word; the writer wants to convey that the structured security is based on another security or obligation. I simply think that "synthetic" or "derivative" are misleading terms because of their alternate specific meanings.

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Please let me know what you think of the changes. I too though synthetic was very vague. —Preceding unsigned comment added by Geoffvf (talk • contribs) 02:18, 28 March 2008 (UTC)

Please note that SEC rule 434 stated in the article is no longer in force. It has been removed as of Dec. 1, 2005.--91.63.113.205 (talk) 10:20, 18 May 2008 (UTC)