Structured Products: The ACPR and the AMF Urge Investors to Be Vigilant

Attractive returns, “conditional” capital protection… Structured products are attracting more and more investors. In an explanatory note published in June 2026, the Joint Unit of the ACPR and the AMF explains how these complex investments work and emphasizes that they should never be considered risk-free investments.
 

A formula-based investment indexed to the markets
A structured product is an investment—such as an investment fund or a debt security—whose value depends on the performance of one or more underlying financial assets (a stock, a stock market index) and a predefined calculation formula. Typical example: a product offering a return of X% per year if the CAC 40 has risen by a specified anniversary date set in the contract. If the condition is not met and the product is held until maturity, the investor may, however, incur a capital loss of up to the amount by which the index has fallen at maturity.
 

The vast majority of these products are linked either to major stock market indices or to indices created specifically for the product—which requires an understanding of their determining factors and potential trends.
 

Three Recurring Mechanisms
Regulators have identified three of the most common mechanisms.
First, automatic early redemption: the product matures early, without any action on the part of the investor, as soon as certain predefined conditions are met—often thresholds that the underlying asset must reach or exceed on specific observation dates—with repayment of the principal and, if applicable, the associated gains.
 

Next, conditional principal protection: all or part of the principal may be protected at maturity, but this protection is generally contingent on the performance of the underlying asset. If the condition is not met, some or all of the principal may be lost. And the higher the protection, the lower the potential return tends to be.
Finally, coupon payments: a coupon is paid periodically or as a one-time payment, often on the condition that the underlying asset performs as specified by the formula.
 

Capped gains, potentially total losses
When combined—which is the case for most products—these mechanisms create a “complex and asymmetric” risk profile, as highlighted by the ACPR and the AMF: gains are capped, while losses can be total. A classic example: as long as the underlying index does not fall below a predetermined level—known as the “knock-out barrier”—the investor recovers their initial principal (excluding fees) at maturity, which protects them against a moderate decline. However, if the index falls below this level, the loss equals the full extent of the index’s decline since the product’s launch.
 

Decrement and Single Underlying: Increased Risks
The note highlights two aggravating factors. First, “decrement” indices: constructed from a dividend-reinvestment index from which a fixed amount (as a percentage or in points) is subtracted, they allow the issuer to hedge against the risk of dividend fluctuations by transferring that risk to the investor. Possible consequence: a significantly lower final return, and difficulty comparing the index to traditional stock market indices familiar to the general public.
 

Second factor: exposure to a limited number of underlying assets—or even a single underlying asset, such as the price of a single stock—whose volatility may be significantly higher than that of diversified indices—and, with it, the risk of capital loss.
 

Regulatory Focus Areas
The ACPR-AMF Joint Task Force concludes with three messages for retail investors. Structured products are complex instruments, whose returns and potential capital protection depend on conditions that may be difficult to understand. Depending on market conditions and the issuer’s situation, losses may be partial or total: these products should not be considered risk-free investments. Finally, a retail investor should not invest in a structured product if they are unable to understand how it works, its performance conditions, and the risks of loss. The role of the distributor is considered essential in this regard: it is the distributor’s responsibility to verify that the client understands the risks to which they are exposed and that the product aligns with their risk tolerance and investment objectives.
 

Source: “Structured Products: Explanatory Note on the Main Characteristics of a Structured Product,” ACPR-AMF Joint Division, June 2026.