Marisk, an independent risk advisory firm, has opened its Abu Dhabi office to help businesses manage the use of over-the-counter derivatives.

The firm will provide independent risk assessment, structuring, pricing and execution advice for derivative and structured product transactions. Marisk’s clients include derivative end-users such as corporations, private equity firms, real estate developers, and family offices with a focus on the Mena region.

“In a derivatives transaction, the fee is totally embedded and highly opaque. If you don’t know how much you’re paying, you’re going to be paying too much,” said Dany Masri, managing director of Marisk Consultants.

“We help our clients combat this natural disadvantage in the marketplace and reduce the unseen fees of such derivatives transactions by creating transparency and competition.”

“With the additional regulation such as the Dodd-Frank Act, dealers will be subject to new capital and margin requirements and it is widely expected that they will pass their own marginal costs onto their clients,” he added.

Companies use over-the-counter derivatives — swaps, options and the like — for a wide range of hedging purposes. Among the most common are exchanging floating-rate interest payments for fixed-rate payments, hedging foreign-currency risk and hedging commodity costs, a statement said.

While useful in nature, the structure and pricing of derivatives contracts is complex and lacks transparency. Using Marisk to advise or implement a hedging strategy allows clients to make informed decisions that result in better execution and directly impacts their bottom line, it added. – TradeArabia News Service