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Vedanta Hedging’s CEO, Abhishek Sachdev, was interviewed by the Law Gazette on interest rate hedging for SMEs.
In the past, many SMEs were mis-sold derivatives by Banks because they could not obtain independent advice. Vedanta Hedging is the largest firm in the UK which can advise all types of firms, from SMEs to PLCs.
Eduardo Reyes produced a detailed article examining how and why these products were mis-sold, and what the FCA did in trying to remedy this. Vedanta Hedging insitigated the IRHP Review and were paid by the FCA to advise them on the initial process of setting up the redress scheme.
However, there have been many problems with the IRHP Review, leading to many SMEs not being compensated billions of pounds in total.
Abhishek Sachdev, chief executive of consultancy Vedanta Hedging Advisory, also raises the issue of consequential loss. In his submission to the FCA’s review, shared with the Gazette, he writes: ‘As the review process unfolded hardly any SMEs were awarded anything material regarding consequential loss.’
In completing his review for the FCA, Swift will also hear criticism of key parts of the redress scheme’s scope and assumptions. Vedanta’s Sachdev writes: ‘There was a wholly misplaced focus on the complexity of IRHPs which led to poor outcomes.’ Business owners were in many cases less disadvantaged by the complexity of products (an assumption made in the redress process) than by the ‘breakage cost’ of the product they had been sold.
The full article can be seen here:
https://www.lawgazette.co.uk/features/hedging-bets/5102752.article
It is vital that firms take independent, FCA regulated advice before they enter into any type of hedging or fixed rates.
