October 29, 2007 1:23 pm

Charles Pretzlik: FSA digs in to hedge funds

Welcome to the first blog from the FT’s fancy new newsroom. Apart from the Starship Enterprise decor, it’s very handy having the markets desks sitting right next to me at last. I get a running market report from Neil Hume, which is nothing short of a privilege.

The impending resignation of Stan O’Neal from Merrill Lynch remains today’s biggest corporate story. This morning’s papers are full of discussion about potential successors so I won’t run through it again here, except to say that Greg Fleming, one of the two internal candidates, has always struck me as an extremely sophisticated banker.

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A Swiss newspaper this morning stoked fears that UBS may turn out to be another Merrill, with Q3 losses much higher than it warned. UBS, however, is trying to put a lid on it by insisting its Q3 loss, to be revealed tomorrow, will be in the SFr600m-SFr800m ($516m-$688m) range unveiled last month. Just shows how nervous Merrill has made people. Having dropped at first, the shares are back up (I only mention this to encourage you to check out our fancy new prices pages on FT.com).

Closer to home, the main story so far is that the FSA is launching a formal assessment of the systems hedge fund managers have in place to guard against market abuse. This follows an initial review showed some managers don’t have adequate controls. The regulator said it was “disappointed” by some of what it had seen on visits to hedge fund managers.

Also, more cute stuff from Resolution Life. It has withdrawn its recommendation of Standard Life’s £4.92bn takeover offer but stopped short of agreeing to rival Hugh Osmond’s £4.94bn hostile offer, putting pressure on both predators to raise their bids. Osmond looks like the one to back, not least because of his large and growing stake in the target.

Ashmore, the emerging market investment manager, intends to raise €500m through the launch of new investment company on the London Stock Exchange. The company will invest across Ashmore’s funds but will focus on special situations – private equity style investment opportunities but with a longer-term, lower-geared profile.

Finally, continuing our week of pieces looking at MiFID, we have a quick guide tonight on what it all means and who is affected. But if, when you see it, you think it isn’t quite enough, don’t despair – there’ll be plenty more where that come from.

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