COLUMBUS, Ohio - The Ohio Legislature might be close to an agreement to ban derivatives usage by local governments, after passing separate bills to do so last year.
State Rep. William G. Batchelder, who serves on the committee to iron out differences between the respective bills, said he expects resolution soon.
"We've reached a point where we have to do something," he said.
Mr. Batchelder said the bills won't be allowed to die, despite the length of time it has taken to reach an agreement. Most of the issues have been resolved, he said.
The bills would ban derivatives as they are most broadly defined, said Jenny Camper, a spokeswoman for Ohio Treasurer J. Kenneth Blackwell. Mr. Blackwell was an initiator of the movement to limit derivatives usage after a government investment pool in Cuyahoga County lost $114 million in leveraged mortgage-backed securities in 1994.
Richard Schumaker, executive director of the $37 billion Ohio Public Employees' Retirement System, Columbus, said the bill does not affect the system.
BARRA ends relationship
Consulting firm BARRA Inc. is no longer affiliated with Mount Lucas Management Corp.'s index of managed futures returns.
Grant Schaumburg, president of Princeton, N.J.-based Mount Lucas, said the affiliation wasn't paying off for Mount Lucas, particularly since Edward Baker left BARRA. He said Mr. Baker was the major force at BARRA promoting the index.
He said BARRA and Mount Lucas never got around to actually signing contracts, and the relationship was ended at year-end.
In 1993, BARRA was enlisted to assist Mount Lucas with changes to the index to make it investable, and to encourage its use as an institutional benchmark.
Andrew Rudd, chairman and chief executive of Berkeley, Calif.-based BARRA, said the removal of BARRA's name from the index doesn't mean the firm's no longer interested in tracking the risk and return of futures and options, and portfolios thereof. He said BARRA executives will continue to use the MLM numbers in its research, and are trying to figure what direction to go with its futures and options research and benchmarking.
Mr. Schaumburg said the index, once again called the "MLM Index," will continue to be run as it has in the past. The MLM Index was up 2.2% in the first quarter, and up about 2% through April 16, bolstered by rising futures prices in grains and petroleum.
Separately, Mr. Schaumburg said an interest rate index using the principles of the MLM Index recently was used in a $20 million synthetic GIC put in a defined contribution plan that he declined to name.
Bayerische picks software
NEW YORK - The New York office of Bayerische Landesbank, a Munich, Germany-based bank, selected a software system sold by Theoretics Inc. to price its derivatives portfolios and improve its risk management, said Ron Bertolini, first vice president and treasury manager. The system, called "TARgA," is designed to allow Bayerische Landesbank to price its derivatives in real time.