By Ted Howard
From taxes to accounting, the June issue of iTreasurer covers a wide varietyof topics, from taxes to new hedge guidance with several stops in between.
First is a story about how countries are weighing the implementation of the ongoing Organisation for Economic Co-operation and Development project known as BEPS or base erosion and profit shifting. BEPS encompasses15 action items that are intended to “equip governments with domestic andinternational instruments to address tax avoidance,” according to the OECD. But theactions are considered “soft rules” and member-country lawmakers can implementthem at whatever level of severity they choose. And this will be an importantbalancing act. Countries do want to collect as much tax revenue as they can;however, they do not want to scare business away either. “My new tax philosophyis not exactly ‘the more, the merrier,'” said Carrie Lam, the new chief executivedesignatein her first public speech.
iTreasurer then looks at data from Fitch Ratings Agency that show cash is trickling back to institutional prime money market funds, pulled in by stable netasset values and widening spreads. However, “trickle” is the operative word here inthat it is likely that the levels of cash going to prime institutional funds will neverreach the pre-reform highs.
In the summary of the NeuGroup’s FX Managers’ recent meeting, we hear whatgroup members discussed about the dollar’s prospects and the Fed. Members alsoreceived an update about changes to hedge accounting requirements; discussedusing options vs. forwards and debated best FX trade execution.
Next, we discuss how time is running out for those companies that want to get ahead of new FASB hedge accounting guidance that will kick in in 2018.Heavy commodity users should consider adopting early, contributor John Hintzesays, because of “several advantageous provisions in the new guidance.”
In “Getting to ‘Know Your Customer’ Is a Major Pain,” contributor GeriWestphal discusses how the KYC “process has become extremely manual and overburdensome with many corporates complaining about the amount of documentationrequired and the extremely slow response times.” But fintech could help,particularly Blockchain technology.
Talent is the subject of a story where contributor Julie Zawacki-Luccidelves into a recent exchange between treasurers discussing whether assistant treasurers (AT) should hold a VP title. A majority of those who spoke up said theirATs do not have a VP designation and were reluctant to start handing them out. Thereason? Title inflation.
Finally, we discuss recent goings-on with Brexit. Most observers feelthat it will be an orderly exit of the UK from the European Union. However, thatdoesn’t mean there will not be some tough negotiations and ruffling of feathers.One area that Europe is trying to get its hands on is the highly profitable euroclearing business that is mainly based in London. The EU is busy trying to make thisthe outcome post-Brexit, with its Executive Commission “readying a draft law oneuro clearing with France at the forefront of eurozone countries angling for a piece,if not all, of the lucrative business.”