Abhishek Sachdev, CEO of Vedanta Hedging spoke with IPE about the potential cost cuttings that can be achieved as a result of using Siren, a new FX fixing benchmark which aims to provide an alternative to the WM/Reuters (WMR) benchmark.
Siren, which is administered by benchmark administrator New Change FX is authorised and regulated by the FCA.
With pension funds constantly looking to cut costs, FX is usually neglected. However FX transactions are becoming more significant as funds are increasingly investing outside of their home country.
The UK Local Government Pension Scheme owns £276bn (€321bn) worth of funds. “If all local government pension schemes used Siren, there could be potential savings of £40m per year. There are around 400 local authorities, which means on average, each would have £100,000 a year to spend on extra services.
It is a carrot-and-stick situation. The carrot for local authority pension funds is that with pressures on finances, there is money waiting to be taken off the table by using a more transparent FX benchmark. The stick is that trustees might be subject to legal action if they are not acting in the best interests of their members.
For the full IPE article, please click here.
Please click here to read our post earlier this year on Abhishek’s interview with FX Markets on Siren.