New York Times Blogs – E*Trade Financial is in talks with Citadel Investment Group, the hedge fund that is its largest shareholder, about a deal to shore up the struggling brokerage firm’s balance sheet, The Wall Street Journal reported, citing people familiar with the matter.

The two companies have been in negotiations for weeks to find a solution to E*Trade’s financial problems, The Journal said, adding that terms of the deal were unknown.

On Tuesday, E*Trade announced that Citadel Chief Executive Kenneth C. Griffin would be joining the firm’s finance and risk-oversight committee.

Read Complete Article

Tags: balance sheet, blogs, brokerage-firm, chief-executive, citadel-investment-group, e trade, e trade financial, finance, griffin, hedge fund, negotiations, new york times, oversight committee, risk, rsquo, shareholder, wall street, wall-street-journal

West Palm Beach (HedgeCo.net) – Global alternative investment industry voice, The Managed Funds Association (MFA) announced that it is joining the major derivatives dealers (the Major Dealers) in presenting a letter to global industry regulators. The letter establishes new commitments addressing key concerns raised by global legislators such as the G20, European Commission and the U.S. Department of Treasury.

MFA members are professionals in hedge funds, funds of funds and managed futures funds, as well as industry service providers. The association first joined the Major Dealers in presenting a letter to global regulators detailing operational targets and other industry commitments in March 2008.

The letter outlines a firm commitment towards strengthening the over-the-counter (OTC) derivatives infrastructure under the auspices of the OMG and its constituents and partners, including the newly formed Board Oversight Committee (IBOC) of the International Swaps and Derivatives Association (ISDA). MFA is dedicated to continuing its collaboration with global regulators, the Major Dealers, buy-side institutions and service providers to reduce risk and improve market infrastructure and practices across OTC derivatives and other financial products.

Richard H. Baker, MFA President and CEO, said, “ MFA , on behalf of the alternative investment industry, is committed to proactively developing and advancing these critical commitments for reducing counterparty and systemic risks and improving operational efficiency in OTC derivatives processing. MFA fully endorses the collaborative efforts with global regulators to support commercially viable centralized clearing platforms, to universally report all OTC derivatives trades and to promote sound business practices. MFA considers today’s letter to be an important step forward for OTC derivatives markets and looks forward to continuing our participation in the design of future steps.”

MFA and its co-signatories are committed to implementing changes to risk management, processing and disclosure that will significantly transform the risk profile of these important financial markets. The OTC derivatives markets provide important flexibility in terms of products and execution and will benefit from a strengthened infrastructure.

Commitments to reduce systemic risk in the OTC derivatives markets include:

Implementing data repositories for non-cleared transactions in the OTC derivatives markets to ensure appropriate transparency and disclosure, and to assist global supervisors with oversight and surveillance activities.

Clearing for OTC standardized derivative products.

Enabling customer access to clearing through either direct access as a clearing member or via indirect access, including the benefits of initial margin segregation and position portability.

Delivering robust collateral and margining process, including portfolio reconciliations, metrics on position and market value breaks, and appropriate dispute resolution mechanics.

Updating industry governance to be more inclusive of buy-side participants through collaborative partnerships among the Major Dealers, MFA and other trade associations.
Continuing to drive improvement in industry infrastructure, as well as engage and partner with supervisors, globally, to expand upon the substantial improvements that have developed since 2005.

Tags: board oversight, department of treasury, futures funds, hedgeco, industry regulators, industry service providers, industry voice, investment-industry, managed-funds-association, market infrastructure, mfa members, mfa-president, operational efficiency, operational targets, otc derivatives markets, oversight committee, richard h baker, sound business practices, systemic risks, west palm beach

Wall Street Journal Blogs – Wasim Rehman, the 28-year-old head of risk controls at the hedge fund manager Marshall Wace, has resigned from the partnership and plans to retire from the investment industry.

In a statement to the market this morning, Marshall Wace said Rehman would continue as a consultant to the company, initially full-time as chairman of the firm’s quantitative oversight committee, but then becoming part-time and “thereby fulfilling his desire to pursue other opportunities outside of the industry.”

Read Complete Article

Tags: blogs, desire, full time, hedge-fund-manager, investment-industry, marshall wace, oversight committee, part time, partnership, risk controls, stock increase, wall street, wall-street-journal