UK - Proponents of the UK transition management industry proposed code of conduct, the T-Charter, have rounded on potential non-signatories and demanded they explain to pension funds what their objections are.
During a heated debate at the annual Global Pensions Transition Management Forum 2006 in London last month, key players agreed there was no room for the practice of pre-hedging (trading on the knowledge of a clients’ impending re-allocation of assets), a practice set to be banned under the T-Charter.
The implications of the T-Charter have been felt globally with keen interest expressed in Germany and in the US.
Global Pensions exclusively revealed in July that Goldman Sachs had, for the moment, decided to sit out of further discusuons on the charter.
Graham Dixon, managing director and head of transition management at Credit Suisse, said: “I think the T-Charter will be launched, it will be launched by the end of the year and then we will see the effect it will have on the transition management industry.”
Ben Gunee, European director of Mercer Sentinel Group, commented: “Anyone not signing up to the T-Charter will have to give clear reasons why they have failed to do so, and where they have deviated from it.”
Andrew Chesledine, consultant at Hewitts, agreed with Gunee, but added: “We [consultants] can’t operate under FSA rules without professional indemnity insurers, and I can tell you for a fact that the insurers are questioning consultants on their attitudes to the T-Charter.”
Earlier, Jody Windmiller, Euro-pean head of project management at UBS Investment Bank had confirmed to Global Pensions that MIFID would not in itself outlaw the practice of pre-hedging.
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