Sunday, December 18, 2011

Nothing to do with me, sorry

Goldman Sachs. The Cayman Islands.  A complex structured investment vehicle.  The Irish Stock Exchange.  What could possibly go wrong?

The Financial Times (subs. req'd) explains, the gist being the attempt to market the thing with all the above features while still having it as an Islamic security:

Lawyers who structure products to comply with Islamic law warn that, whatever the merits to the scholarly debate, investors may be deterred by the doubts. “Goldman can list this programme on the Irish Stock Exchange, but that does not mean they will get the buyers,” said one lawyer who specialises in the field. “They may well find there is not much demand because of the widespread doubts over the issue in the market.” ... He added that Goldman would make use of the commodities and was not just flipping them to the original seller to create the illusion of a sale. And he said that the listing on the Irish Stock Exchange was for regulatory and tax purposes – scholars and potential investors did not anticipate a secondary market.

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