This week’s International Treasurer editorial meeting brought up a host of topics, including treasury tech/ecommerce security, bond markets, transfer pricing and a pooling optimizer.
eCommerce security
Recent discussions at the NeuGroup’s Engineering & Construction Treasurers’ Peer Group (E&CTPG) fall meeting included one on guarding against fraud. At the meeting, Bank of America’s Milton Santiago gave a presentation on fraud in terms of ecommerce and banking. According to Mr. Santiago, the weakest link in fraud protection is typically companies with inadequate controls – and not banks (in a pre-meeting survey most members felt banks were the weakest link). As such, he said, having robust controls to prevent fraud can tighten up those controls and also stops most phishing, smishing and other like hacker threats. A related discussion focused on mobile banking for treasury. While members remain timid on adopting mobile means for treasury transactions, Mr. Santiago noted that annually, $8.1 trillion in B2B transactions are being settled with mobile applications today.
Rating Agencies & Road Shows
Also at the E&CTPG meeting was a member-led session describing different forays into the public bond market, including the processes and the many lessons learned. One particular point emphasized: “Do not assume that rating agencies are easy to deal with.” Both S&P and Moody’s were engaged to review and rate the inaugural bond issuance which raised acquisition capital. In comparison, another member used a Canadian rating agency (DBRS) familiar and friendly with the E&C industry to obtain a favorable private rating for a bond placement to support its acquisition. Both members did road shows to attract investors.
Transfer pricing
Since the beginning of the financial crisis and its follow-on hit to tax revenue, governments around the world have been on the hunt for revenue. In doing so, they have been strengthening their corporate tax regimes, which means multinationals have been getting creative when it comes to tax policy. In many cases they’ve looked at transfer pricing, the process of inter-company pricing arrangements relating to transactions between related business entities. The increasing use of transfer pricing has garnered ever more interest from global tax authorities who want to see the innards of such strategies, i.e., more transfer pricing, more transfer pricing audits.
Pooling optimizer
IT will take a look at a “pooling optimizer” app from Standard Chartered. This app reportedly can parse various available countries in which to put a cash pooling structure and come up with the best location.