The New Products Development Committee
The task of the New Products Development Committee (NPDC) is to encourage the development of new
products and decide which new products should be pursued with substantial resources. It is intended to
be a two-way communication vehicle in which the NPT communicates with the rest of the organization
what new products may or may not be in development, and the rest of the organization communicates its
needs for new products to the NPT.
The NPDC meets at least monthly to hear about various new products under development.
The following people sit on the NPDC
· Chief Compliance Officer (CCO).
o The CCO’s job is to make sure that Blackguard complies with all of the numerous
existing and future regulations. In particular, the CCO is concerned about
Regulation Best Interest, which states that recommendations made must be in the
best interest of the client. How can the firm document for which customers this
product is in the best interest? Also, the CCO will be concerned about how the
2
firm will take custody of various crypto assets. SEC Rule 15c3 requires that
custodians demonstrate “possession or control” of customer assets. How can the
firm demonstrate that is the only holder of a private key to crypto assets?
· Chief Marketing Officer (CMO)
o The CMO is concerned about how any new product will be marketed, and thinks
along the lines of the Four Ps of marketing (Product, Price, Place, and
Promotion).
§ What competing products are out there?
§ What is the potential market size?
§ What are the marketing distribution channels (Place)?
§ How will Blackguard price the product?
§ What incentives will there be for these channels to promote the products
(Promotion)?
§ What is the impact on the company’s brand reputation? It could suffer if it
does not offer a full product suite, but it could also suffer horribly from
offering a defective product that imposes losses on customers.
· Chief Investment Officer (CIO)
o The CIO will be concerned about exactly how the proposed products would work.
§ What is their investment thesis?
§ What are the risk and return of the assets going forward?
· Source of these forecasts?
§ What kind of investment strategies would be used?
§ How do they correlate with each other and other asset classes?
§ Why and how can Blackguard generate alpha with these assets?
· Head of Trading (HoT)
o The HoT will want to know what the expectations will be on the trade execution
team.
o How will the crypto assets be traded?
o Can Blackguard trust the crypto exchanges or should it use defi apps?
o How many trades will be made?
· Head of Business Development (HBD)
o Blackguard has grown through acquisition. The firm may want to buy a firm that
already has products in the crypto space rather than launch new me-too products
on its own. The HBD will be very curious about other asset managers in this
space
§ Should Blackguard build the products internally or buy a firm that already
has them? A number of firms such as Grayscale have already launched
crypto products. HBD wants to know more about the other companies
already in the space.
· Deputy General Counsel (DGC)
o Will ask penetrating questions about obscure details.
· Deputy COO
3
o Needs to make sure that all of the operational needs for launching, marketing, and
managing the product all work together.
§ How will Blackguard hold custody of digital assets?
o How many FTE are needed (and when) in each department to support the product
and when?
· Deputy CFO
o Concerned about numbers.
o What is the impact on the bottom line? How much will we make?
o What are the impacts of the trading on the firm’s risks?
Your presentation should attempt to address the concerns of all the attendees. In particular, it should
cover:
1. Brief background on cryptos
a. Bitcoin, various tokens, etc.
b. Which crypto products are likely to last and which ones are not
2. Investment case for cryptos
a. Risk, return, correlation
b. Source of forecasts for these data
3. Potential market size for products
4. Recommendation on potential retail products.
a. Actively managed funds
b. ETFs
c. Stablecoins
5. Target markets / Distribution channels for products
a. HNW and accredited investors
b. Direct retail
c. Adviser channel
6. Compliance issues
a. Custody
b. Suitability
7. Regulatory issues
a. What approvals might be needed
8. Competition
a. What existing products are there?
b. Who is offering them?
i. Should we buy them?
9. Recommendations
a. Buy or build?
10. Budget needed to proceed, if any
