What’s on International Treasurer’s radar screen this week.
A number of issues came out of this week’s editorial meeting, most notably the impact of recent margin proposals and how treasurers are handling an increase in accounting demands. Also, IT will explore the latest thinking on optimal investment policy.
Margin rules impact. On April 12, both the Commodity Futures Trading Commission (CFTC) and the US prudential bank regulators released proposals on margining. While the CFTC largely will honor an exemption for corporate end-users, it appears the prudential regulators will make an exemption conditional. The question for corporations is whether the lack of an iron-clad exemption will allow regulators to expand the rules later on. Also, if current proposals are implemented as is, how will they impact current credit support agreements? Will they will complement each other and will CSAs need to be tweaked to make them more consistent with Dodd-Frank rules?
Thinking anew about treasury controller groups. In the wake of the financial crisis, corporate treasurers are finding themselves continuing to be drawn into accounting and reporting issues. This is unlikely to abate, as audit firms’ CYA instincts heighten with the appointment of James Doty as head of the Public Company Accounting Oversight Board, who has been critical of audits involving financial institutions during the crisis and amid Senate’s review of the accounting industry (currently the Senate Banking Committee is considering stricter regulation for it).
For some members of The NeuGroup’s peer group universe, this has added enough work that in some cases, a separate team or even department has been created within treasury to handle accounting and control. Eventually, separation of duties warrants consideration of having the group report directly into the controller. What’s the best configuration with treasurers setting up or revamping treasury-controller functions now?
Optimal investment policy. A popular topic at several recent NeuGroup meetings has been how to create the optimal investment policy—it is also on the agenda for next month’s Treasury Investment Managers’ Peer Group (TIMPG) meeting. The question is, how specific the document should be and when should it be presented to the board? Should it be broad and enable treasurers to have wide enough latitude so they don’t have to go before the board for every tweak and asset change?
Business intelligence. The question of treasury use of business intelligence software is growing, often in conjunction with forecasting activities. To that end, IT will explore how and whether treasury is using the current offerings out there, including Hyperion, Cognos and others.