BPVBR72 – XS2550411008
Bit of a tricky one, the documents you attached cover what most of the structured product factsheets cover. There confirmed that the products were issued as a type of note (so a security for ISA purposes) and they confirmed that Citigroup Global Markets was the issuer of the notes.
The ISA regulations (and ISA Guidance) don’t make any reference to ‘Structured Products’, possibly because there’s no legal definition as to what these are.
So, most of these types of structured products are issued as either a note or certificate (like this one – structured notes), which is treated as a type of security.
So, for ISA purposes, they would have to meet the ‘qualifying securities’ criteria. This means that they would have to meet the ‘listing’ requirement which is satisfied as long as the security itself or the shares in the issuing company are listed on a recognised stock exchange or traded on a recognised stock exchange in the EEA including the UK.
In most cases, the ISA qualifying securities rules mean that either the security itself or the shares in the issuing company need to meet the ISA listing rules, there is a third possibility, where a security is issued by a company which is a subsidiary (at least 75%) of a parent company and the shares in the parent company are ISA qualifying – see ISA guidance below.
So, in this case, if the issuing company (Citigroup Global Markets) is at least a 75% subsidiary of Citigroup Inc., this structured product will be ISA qualifying.
‘Citigroup Global Markets is a subsidiary of Citigroup Inc. and although we would expect this to be a 100% subsidiary of Citigroup Inc., we haven’t been able to clarify this, so we are not able to provide a definitive response on this security.
If you feel you have sufficient evidence regarding the subsidiary being at least 75% then obviously you can go ahead and purchase the security within the ISA wrapper as the final decision on the eligibility remains with yourselves as ISA manager.