GLOBAL - Rick Di Mascio, chief executive of Inalytics and chair of the T- Charter, has hit out at managers which signed up to the agreement only to immediately condemn it for not going far enough.
In a joint statement yesterday State Street Corporation, Barclays Global Investors and Russell Investments said: "While we welcome and applaud any initiative that aims to set best practice standards for the transition management industry, we are concerned that in this case the standards for performance are not as strong as they should be and ultimately may not provide a sufficient level of protection or comfort to clients."
However in a statement to Global Pensions Di Mascio hit back, condemning the criticism as an example of parts of the industry seeking short term competitive advantage.
He said: “It should not go unnoticed that there were 17 providers including, ironically, the 3 dissenters, who support the T Charter and its objectives and collectively believe that this represents a valuable guide for clients.
"When they say that “it doesn’t go far enough” they will be aware that at times the specific provisions they were looking for could have acted as a restriction of trade. Apart from the legal implications, it is not the purpose of the T Charter to restrict a client’s choices, our role is to inform on the key issues and to ensure there is a level playing field between the providers."
Di Mascio concluded: "On the issue of pre hedging, these providers will be aware that it is permissible under current regulations and that we had clear guidance that the T-Charter could not and should not seek to override the rule book. Once again it is the role of the T-Charter to inform clients as to the issues should they wish to give a transition manager permission to pre hedge."
Defending the decision to criticise the charter Ed Pennings, head of transition management, State Street, said: “I don’t want to go so far as to sink the T-Charter, we fully support the principals behind the T-Charter.
Pennings continued: "Our joint opinion is that it does not go far enough and as an industry we could have gone further. The reason why it did not go further is that everyone’s business model needed to be incorporated, so we automatically ended up with the lowest common denominator.”
Graham Dixon, managing director and head of European transition services, Credit Suisse, defended the charter.
Dixon said: "It is not our place to comment or speculate on why some firms which have signed on to the T-Charter have now decided to criticise it. We firmly believe the T-Charter provides the transition management industry with a set of common standards which has been created with both transition manager clients and advisers in mind."
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