GLOBAL - The UK transition management industry has finally agreed to the T-Charter, a voluntary set of common standards.
The charter took over two years to agree with the issue of whether the practice of pre-hedging should be banned proving a major stumbling block.
The document released this morning did not ban the practice, but instead required that any use of pre-hedging be fully disclosed and agreed in legal documents before hand.
The charter was agreed by the majority of transition managers; of the major players only Legal and General has so far not signed up.
The charter is expected to have an impact across the globe with many non UK funds, including the French FRR, already having referred to it when issuing RFPs, while the document was still under construction.
As yet it remains unclear how many transition managers will incorporate the document into their legal agreements.
Rick Di Mascio, chief executive of Inalytics and chair of the T- Charter told Global Pensions he was delighted that an agreement had finally been reached.
Di Mascio also noted the role Global Pensions, through its Transition Management Forums and editorial coverage, had played in helping to secure the agreement.
He said: “Global Pensions in particular has played an important role with its accurate reporting and support of the T-Charter throughout its creation."
Commenting on the document itself he explained it was a framework and not a legal document.
“In practice it is more useful. It is something which is in plain English and is not covered in legal caveats. As a result it highlights the key issues about issues such as conflicts of interest, remuneration and measurement,” he said.
Di Mascio added: “This is a document which signpost and flags all the key issues that pension funds should address with their advisors or transition managers. It means the client base is fully informed.”
Participating managers are: ABN AMRO, BNY Global Transition Management, Barclays Global Investors, BlackRock, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, Mellon Transition Management, Merrill Lynch, Morgan Stanley, Northern Trust Global Investments Limited, Russell Investments, State Street and UBS.
Copies of the T-Charter will be available at - http://www.tm-gateway.com/
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