GLOBAL - Including stronger principles on best practice for transition managers in the so-called 'T-Charter' could have amounted to restrictions on trade, Rick Di Mascio, chief executive of Inalytics and chair of the T-Charter working group, has explained.

The T-Charter was unveiled yesterday as a voluntary code of standards for transition managers but was swiftly criticised by three of its signatories shortly after the launch.

State Street, Barclays Global Investors (BGI) and Russell Investments argued the principles were "not going far enough" and said clients should not rely solely on the T-Charter in choosing a transition manager (see earlier IPE article: T-Charter labelled as 'too weak')
But Di Mascio, has hit back at critics.

"This is yet another example of parts of the industry seeking short-term competitive advantage by undermining an initiative that is genuinely valuable to clients," claimed Di Mascio.

He explained some of the suggestions made by the critics to be included in the charter "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 choice," added Di Mascio. "Our role is to inform on the key issues and to ensure there is a level playing field between the providers."

He specifically pointed out the issue of preventing pre-hedging.

"It is permissible under current regulations and that we had clear guidance that the T Charter could not and should not seek to over ride the rule book," continued Di Mascio.

In a similar move, Graham Dixon, head of European Transition Services at Credit Suisse, also commented: "It is not our place to comment or speculate on why some firms who 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."

Ben Gunnee, European director of Mercer Sentinel Group, further added: "The T-Charter marks a new stage in the transition management industry's evolution." Mercer anticipates the T-Charter to "continue to evolve and be enhanced over time".

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