Goldman Sachs' plan to spin off its proprietary trading business has run into trouble because the investment bank does not want to give the new entity access to its specially designed computer language, according to CNBC.
Earlier this week CNBC reported that Goldman is seeking to spin off the unit, possibly by the end of the week, letting it run as a separate hedge fund.
The move is designed to help Goldman comply with the Volcker Rule that will prevent banks investing more than three per cent of regulatory capital in hedge funds or private-equity funds.
However, CNBC says the bank will not give the spun off unit the rights to Slang, the special computer language developed for internal use and vital for its high-frequency trading operations.
It is now frantically rushing to hire experts to translate the trading programs into a "more standard computer code" that the spin-off can use, says CNBC.
The value of proprietary trading code was highlighted earlier this year when former Goldman programmer Sergey Aleynikov was indicted on charges related to the theft of code connected to the investment bank's high-frequency trading platform.
Goldman Faces Technology Issue With Spinoff - CNBC