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(Bloomberg) -- Sales of certificates in Italy climbed to an all-time high of 8.16 billion euros ($9.3 billion) in 2014, a year after breaking the previous record, as investors embraced structured products as an alternative to low-yielding bonds.

Banks sold 29 percent more notes last year than in 2013, when the previous sales record of 6.33 billion euros was set, according to data from the Italian Association of Certificates and Investment Products. More than half of the notes sold in the fourth quarter of 2014 protected investors’ principal, while equities remained the most popular underlying linked asset.

Structured-product sales across Europe rose 3.4 percent to $63.3 billion last year, according to data compiled by Bloomberg, as buyers searched for yield amid low interest rates and forced banks to add complexity and extend maturities. That came as regulatory attention intensified, with trade groups moving to adopt transparency measures ahead of strict European rules set to take effect in 2017.

“Low interest rates and low yields drove investors to the products,” said Marcello Chelli, head of listed products for Italy at Societe Generale SA in Milan. “At the same time, they wanted a certain degree of protection.” He added that notes tied to credit and emerging market currencies saw increased demand, as well as securities denominated in U.S. dollars.

After registering their strongest quarter ever in the first three months of 2014, sales in Italy declined in every subsequent quarter, according to data from the association. In the fourth quarter, banks sold 1.17 billion euros of the securities, less than half of what they’d sold at the beginning of the year.

Regulator Advice

Distribution networks may have turned their focus away from the securities and toward other products after the strong start, said Chelli. The Italian securities regulator also proposed rules in May to curb sales of certain structured products to individual investors. Officials finalized the proposals in December, advising distributors to steer clear of non principal- protected securities and credit-linked notes.

Italy’s surging sales bucked the trend last year, as trading on exchanges across Europe was either flat or down. Turnover on the SIX Structured Products exchange in Zurich fell 11.6 percent to 26.8 billion Swiss francs ($29.6 million). On the Frankfurt bourse, trading rose 1.5 percent to 15.9 billion euros. In an interview earlier this month, Andre Buck, head of sales at the SIX Exchange, blamed low stock volatility for the slump.

To contact the reporter on this story: Yakob Peterseil in London at ypeterseil@bloomberg.net To contact the editors responsible for this story: Richard Bedard at rbedard2@bloomberg.net Chapin Wright

Bloomberg