UK - Plans for a standardised set of business guidelines for the transition management industry are on the verge of collapse if key members cannot come to an agreement today on vital components.
Investment banks and asset managers remain at loggerheads over the permissibility of pre-hedging, which a recent draft of the UK’s T-Charter had disallowed, and the extent to which firms disclose their profits and loss on a transition.
The T-Charter is a set of 10 principles designed to protect institutional clients from “poor or questionable” practices within the transition management industry.
Rick Di Mascio (pictured), chief executive at Inalytics, who will chair today’s meeting of a select seven-member sub-committee, warned if the latest proposal failed to find harmony, it could spell the end for the T-Charter.
“There is a current draft of the T-Charter on the table that goes a long way to reconcile the different points of view and we will see if it produces the desired consensus,” he said. “If it fails, we will have to recognise that this process has already taken 16 months and it is difficult to see how else we will get a result.”
Sam Lundqvist, portfolio manager at Russell Investment Group, said the previous sub-committee meeting ended in a stalemate.
Despite this, some in the industry are confident the standard will be adopted by various members of the transition management industry regardless of its final format.
Graham Dixon, managing director and head of European transition management at Credit Suisse, said: “I can see there being a potential break-away group that will just say ‘we don’t need a unanimous decision’. Some pioneers may sign up to the T-Charter, others may choose to sit onthe fence.”
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