Glossary
COSI (Collateral Secured Instrument)
COSI stands for Collateral Secured Instrument and refers to structured products where the issuer deposits collateral covering its obligation to the holder, held in custody at SIX Swiss Exchange. In the event of the issuer's insolvency, this collateral may be realised, which reduces but does not fully eliminate the risk of loss.
At a glance
- COSI products reduce Issuer Risk through exchange-held collateral, but do not eliminate it entirely.
- The collateral buffer may vary depending on market conditions; a residual risk remains with the holder.
- COSI is a collateral system administered by SIX Swiss Exchange, specific to the Swiss market.
Frequently asked questions
COSI products provide a degree of protection against issuer insolvency through deposited collateral. This protection is not complete, however: realisation costs, timing, and the value of the collateral at the point of insolvency can mean that a portion of capital is lost. COSI products are therefore more secure than unsecured certificates, but are not a risk-free investment.
Part of the topic
AMC & Structuring
Sources: Swiss Structured Products Association (SSPA)
This entry is for general information purposes only and does not constitute investment, legal or tax advice. It is a simplified summary of the legal position and tax treatment.