STANDARD Life appears in two of today's papers for rather different reasons. The Scotsman reports the provider has appointed one of the UK's highest profile actuaries in what it calls a significant step towards its forthcoming flotation.
The paper says Standard Life has brought in Michael Arnold - who played an integral role in the demutualisation of Scottish Widows and Scottish Provident, as well as the formation of Equitable Life’s compromise scheme - as it gears up for a 2006 stock market listing.
The next year will see the Edinburgh-based firm vie to get its business in optimal shape. Job losses and a drive to ditch "bad" business in favour of more profitable mandates are likely, claims the Scotsman.
Standard Life must attain approval from the Financial Services Authority, Scottish Court of Session and an independent actuary, as well as 75% of its members, to push through the planned demutualisation. Arnold’s appointment has been approved by the FSA.
The independent actuary will play a key role in Standard Life’s demutualization team, with responsibility for ensuring qualifying with-profits policyholders receive a fair deal.
THE OTHER STORY featuring Standard Life features Sir Brian Stewart, the mutual’s chairman, predicting the mortgage endowment policy will make a comeback. The Times reports Stewart saying: “Endowments have worked for a lot of people. They are not all bad news.” He said that endowment policies had generated good investment returns.
Stewart is reported as saying the financial services industry should have reset forecasts earlier, when it became apparent that lower inflation and lower interest rates meant that returns would also fall.
MEANWHILE the Guardian claims that a bitter dispute has broken out between the Treasury and top companies over the effects of tax avoidance measures introduced in last month's budget, leading some firms to claim privately that they will be forced to relocate abroad unless the measures are reversed.
Executives claim poor drafting of legislation that is due to become law if Labour is re-elected means they face being taxed several times on the same income. Action aimed at complex tax avoidance schemes has instead thrown innocent and common corporate structures into doubt, they say.
ACCORDING TO the Financial Times banks trading in credit derivatives must maintain strong “Chinese walls” between lending and trading departments or they may face insider dealing charges. The paper reports European banking groups are warning their members they must not use private knowledge about corporate clients to trade instruments such as credit default swaps (CDS).
The warning comes from a report drawn up by five bodies including the International Swaps and Derivatives Association and the Loan Market Association.IFAonline
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