Shared Service Centres – treasury trends

Treasury is a constantly evolving profession, as the ACT’s current Business of Treasury research shows, with treasurers’ strategic engagement with their organisations increasing. One area where I have seen this happening is with treasurers’ involvement with their organisation’s Shared Service Centre (SSC). Shared Service Centres – why the interest? Evidence came from two key sources. Firstly, an increased number of requests to provide learning support for treasury teams within SSCs and secondly, discussions with treasurers who were being asked to take responsibility for the treasury aspects of the SSC teams. As this increased, the ACT felt that it would be

No cash management, no long-term future

Cash management is often seen as the routine part of the job, the bit where process can be perfected and no-one in the company takes much interest until something goes wrong, like a supplier is not paid. That is a myth! Cash management is the glue which holds the company together and it is the start of the whole strategic process. It’s also a way for the treasurer to get their foot in the door of operations and really find out what is going on. Funding the company is arguably the only job which the treasurer must always get right

Will Brexit cause walls to collapse or only cracks to appear?

The Brexit topic continues to draw in the crowds at any seminar and this morning (31 January 2017) was no exception.  It was ‘standing room only’ at Slaughter and May’s client seminar titled: Tremors and Aftershocks: How to manage the impact of the Brexit earthquake and recent world events. How to manage the impact of the Brexit earthquake?  It was clear that we’re not yet sure exactly when the earthquake will happen, the magnitude, or even where the epicentre will be.  From a poll of attendees 37% thought it was too early to understand how Brexit was going to impact

Happy, well perhaps interesting 2017

We sit in London looking out on the office blocks of the financial services community and that does give a bias to be drawn to read the Brexit blurb in the press but 2017 will raise issues which transcend the UK’s self-imposed uncertainty of stepping out of one trade bloc in the hope of creating its own. Brexit has yet to formally commence although we now know how to do that. We will continue to watch and worry over its development for several years. The themes we can expect to develop to some tangible outcome during 2017 are bank regulation

Financial regulation – a step closer for corporates

I recently attended a roundtable to discuss the forthcoming UK Money Markets Code (which ironically will not cover MMFs).  The opening sentence uttered by a banker who was co-hosting the meeting was “this is not regulation by the back door”.  I listened, argued, tried to believe it, but don’t. If bankers want to impose ‘soft regulation’’ on themselves that is fine (and arguably laudable) but my real concern is that old saw of ‘unintended consequences’…  Basically any corporate who is “regularly active” in placing money on deposit, investing in repos or borrowing and lending securities will be caught by the

UK Payments Strategy for 21st Century

The final strategy document has been published and can be viewed here. The (Payment Services) PS forum has spent the last year talking to stakeholders across the UK to develop this strategy to meet perceived shortcomings in the UK payments infrastructure. The ACT responded to earlier drafts and calls for discussion. Members sit on the Forum and its sub groups. In general we agree to a strategy that foresees development of a more simple system which will be PSD2 compliant and seek further standardisation of file format to ease exchange of data. The impact on corporate treasurers, and their IT

Regulatory Update from the European ACT – Nov 2016

The EACT’s monthly update can be found here. EU members are reminded that their UK operations will continue to be required to comply with EU regulations until Brexit occurs, and should expect much of the EU originated regulation to continue once completed. The UK is separately a member of the G20 and that organisation is the ultimate source of much of the change which has been brought into effect in the UK since 2008 albeit through the EU. Notable exceptions are: Financial Transaction Tax: FTT is being considered by 10 member states which do not include the UK and so

Managing FX risk: Are exotic options a solution?

Corporate treasuries typically have limited discretion in managing market exposure and must routinely hedge foreign exchange and other identified exposures. The hedge to eliminate the risk is normally implemented shortly after a foreign exchange exposure is identified – often on the same day. The vast majority of hedges are implemented using forward rates structures because they are straight forward and provide a clear link to the underlying exposure. They also have the advantage of requiring virtually no up-front cost compared to an option trade. But there are embedded costs of hedging using forwards. Figure 1 shows that many emerging   market currencies