Goldman Plans To Close Prop Trading (For Real This Time)

Tyler Durden's picture

BN  10:03 *GOLDMAN SACHS SAID TO PLAN TO CLOSE PROPRIETARY TRADING UNIT
BN  10:03 *GOLDMAN PRINCIPAL STRATEGIES TRADERS IN NY MAY JOIN OTHER FIRM
BN  10:03 *GOLDMAN PRINCIPAL STRATEGIES HEAD SZE MAY START A HEDGE FUND

So as long as you do one flow trade a year, you are considered a flow trader? Brilliant.

From Bloomberg:

Goldman Sachs Group Inc. is shutting
its principal-strategies business, a group that makes bets with
the firm’s own capital, to comply with new U.S. rules aimed at
curbing risk, two people with knowledge of the decision said.

Wall Street’s most profitable investment bank plans to hold
off on announcing the wind-down while the 65 to 70 members of
the global unit seek new jobs, the people said, speaking
anonymously because the internal discussions about the process
are confidential. Some traders and support staff may get roles
within the firm, while a team in Asia may raise money for a new
hedge fund, the people said.

Ed Canaday, a spokesman for New York-based Goldman Sachs,
said he couldn’t comment.

Earlier plans for most members of the Principal Strategies
group, led by Hong Kong-based Morgan Sze, to leave together and
form a hedge fund were shelved, people with knowledge of the
matter said. Now Sze, 44, may set up a fund with a smaller team
focused on Asia, they said. Employees in London and New York are
considering different options, the people said. The team’s
members in New York, led by Bob Howard, are in talks to join
another asset-management firm, according to two people.

Goldman Sachs, which says about 10 percent of its revenue
comes from proprietary trading, is grappling with a provision of
the Dodd-Frank financial reform act that prohibits banks from
risking capital by betting for their own accounts. JPMorgan
Chase & Co.
plans to close its prop-trading units in response to
the law, signed by President Barack Obama in July. JPMorgan last
month told in-house commodities traders in London that they may
lose their jobs, a person briefed on the matter said this week.