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Former Lehman chief in boutique start-up

Former Lehman Brothers head of structured retail products Adam Habib has started a boutique investment company which will offer mutual funds, structured products and hedge funds.

Jubilee Financial Products launches its first range of structured products next week.

Habib, who left Lehman in June and was previously head of equity derivatives sales for Europe, the Middle East and Africa at Credit Suisse, believes that advisers will continue to use structured products as long as firms focus on transparency.

He says the FSA should introduce greater disclosure requirements on trading volumes of credit default swaps to help retail investors evaluate the counterparty risk of publicly traded companies.

Habib believes that the value of credit ratings from Moody’s Investors Service, Standard & Poor’s and Fitch have been negated in the current market and says CDS pricing is an important indicator of whether one should buy equities or debt or invest with any entity. However, he says few have access to it due to its high cost.

A CDS is a contract between two counterparties and an increase in its spread can signal a deterioration in an ent- ity’s credit-worthiness while a fall can indicate the reverse.

Firms which source CDS pricing can charge up to £20,000 a year for access to their live pricing. Habib says: “People should be publishing CDS levels on publicly traded names as it is unfair that investors do not get access to this information. This is perhaps another role for the regulator as it is not an easy task for a professional, let alone a retail investor.”

An FSA spokesman says: “We have been working with the US regulators in this area and we are very supportive of the work they are doing to try and move CDS trading on to recognised investment exchanges.”


Charcol close to completing restructure

John Charcol has taken out a new debenture loan while its company accounts and annual returns remain overdue but the firm says its restructure is “almost complete”.

Caught on the opt

I read something the other day about the auto-enrolment of 10 million employees into pension saving in 2012. You probably already know the plot of this future horror story by heart. Ten million employees who currently do not receive a pension contribution from their employer will be swept into voluntary pension saving by legislation. The pension saving will be voluntary in the sense that if they do not want to save in a pension, they will be allowed to opt out of auto-enrolment.

Knight rdr

Leaving last week’s FSA conference on the retail distribution review, it was very obvious to me who was the clear winner of the contest – Stephen Hadrill of the Association of British Insurers.


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