WASHINGTON -- Securities firms that buy derivatives face a tough challenge in understanding the products and the tools available in pricing them, industry sources said. George Hall, president of the Clinton Group, said firms need to be capable of designing their own pricing models. His remarks were made at a conference in New York City on pricing and valuation of fixed-income securities and derivatives that was sponsored by Frank J. Fabozzi Associates and Information Management Network.

"If you don't know how to do this stuff, meaning you can't do this inhouse, and you have to rely on outside people, it's probably better to stay out of this stuff," Hall said Monday at the conference.

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