March 13, 2013
A brief look at the issues on International Treasurer’s radar screen this week.
A couple of topics came up for further exploration during International Treasurer’s editorial meeting this week, including how the likely new Securities and Exchange Commission head, Mary Jo White, will quickly jump into the money market fund fray. Also on tap is a look at how overseas corporate cash continues under the gun.
MMF regulation and Mary Jo White.
SEC nominee Mary Jo White has said during the confirmation process that she won’t wait to step into the raucous debate over money market funds (MMFs). The agency, the Financial Stability Oversight Council as well as the Federal Reserve have been locked in a battle with the industry over tightening regulations on MMFs, including making the funds introduce a floating net asset value. To say it’s a touchy subject with the SEC would be an understatement, as infighting there cause a postponement of new reforms. Since then the Fed and FSOC have pushed hard for changes. In her confirmation hearings so far, Ms. White has promised that the agency would take up the topic again. According to news reports she has suggested that any new rules would not interfere with “the value” of the funds.
A couple of topics came up for further exploration during International Treasurer’s editorial meeting this week, including how the likely new Securities and Exchange Commission head, Mary Jo White, will quickly jump into the money market fund fray. Also on tap is a look at how overseas corporate cash continues under the gun.MMF regulation and Mary Jo White.
SEC nominee Mary Jo White has said during the confirmation process that she won’t wait to step into the raucous debate over money market funds (MMFs). The agency, the Financial Stability Oversight Council as well as the Federal Reserve have been locked in a battle with the industry over tightening regulations on MMFs, including making the funds introduce a floating net asset value. To say it’s a touchy subject with the SEC would be an understatement, as infighting there cause a postponement of new reforms. Since then the Fed and FSOC have pushed hard for changes. In her confirmation hearings so far, Ms. White has promised that the agency would take up the topic again. According to news reports she has suggested that any new rules would not interfere with “the value” of the funds.
Explain that offshore cash.
There continues to be growing pressure from the US government – as well as societal pressures – concerning the billions of US corporate cash piling up overseas. And in keeping with that trend, a lot has been said about undistributed earnings and “Indefinite Reversal Criterion (APB 23).” This code provides an exception to the general rule that a US MNC must pay US taxes on the foreign earnings of its controlled offshore affiliates. Companies and their tax departments will have to become even more familiar than they are with the code and make sure the company is compliant. Not only could it become a legal issue for companies but a reputational one as well.