modern setup requires a comprehensive understanding of: Prevailing regulatory environment, specifically existing and forthcoming regulations including MiFID II, KYC, PRIIPs-KIDs, etc. Principles of risk-based capital/liquidity requirements specified by Basel III, FRTB, etc. Real-life quantitative pricing models able to handle multi-curve environments, volatility smile/skew, etc. Structured product payoff features and their risk characteristics, as above Structured product manufacture process, and the "derivatives business" value chain - i.e. linking trading, structuring, quantitative modelling and risk management Structured product distribution channels, product wrappers, impact of e-platforms Product design and manufacture Structured products aspire to provide investors with highly targeted investments tied to their specific risk profiles, return requirements and market expectations. Benefits of structured products may include: Principal protection, as above (depending on the type of structured product) Tax-efficient access to fully taxable investments Enhanced returns within an investment (depending on the type of structured product) Reduced volatility (or risk) within an investment (depending on the type of structured product) Ability to earn a positive return in low-yield or flat equity market environments Ability to minimize issuer risk by using collateral secured instruments (COSIs) backed with collateral in the form of securities or cash deposits Historically, this aspiration is met with an ad hoc approach: the structure of the product is postulated in a way that seems appropriate for the client. Within this approach it can be difficult to articulate the precise problem the product is designed to solve, let alone to claim the product as optimal for the client. Nevertheless, this approach is still widely used in practice. A more advanced mathematical approach to product design has been proposed. It allows the structure of financial products to be derived as a mathematically optimal solution to the clients' needs. This approach demands higher proficiency from both the structurer who designs the product, and the client who needs to understand the proposal. Once the product is designed, it is manufactured through the process of financial engineering. This involves replicating the product through a trading strategy involving underlying instruments such as bonds, shares, indices, commodities as well as simple derivatives like vanilla options, swaps and forward contracts. Risks The market for derivatives has grown quickly in recent years because, as above, they perform an economic function by enabling the risk averse to transfer risk to those who are willing to bear it for a fee. At the same time, there are several risks associated with