Europe and Ireland: Dates for your diary!!
Europe and Ireland, June 2017
Important dates coming up over the next 24 months that may impact treasury management from a risk and regulatory perspective. More info
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Europe and Ireland, June 2017
Important dates coming up over the next 24 months that may impact treasury management from a risk and regulatory perspective. More info
Updated: June 12 2017
The Brexit Drama has continued to unfold within a background of dramatic elections in both the UK and France. However, the bottom line remains unchanged – the UK will exit the EU, negotiations proper commence next week, and there is less than two years to agree a plan for the future relationship between the EU and the UK. There is a need to continue to monitor and manage the treasury implications arising. Our Brexit Treasury File updates the current position. More info
Navy Pier Convention Center, Chicago, May 23-25 2017
The Windy City Summit is one of the largest treasury and cash management conferences in the US, attended by more than 1,250 finance professionals. The Windy City Summit offers educational sessions, keynote and featured speakers, multiple networking opportunities and the occasion to meet Pat Leavy and Justin Callaghan of FTI Treasury.
Visit FTI Treasury at Booth 113 in the expo hall to see how US multi-national companies use treasury outsourcing services to meet their needs for European and global cash pool administration, liquidity and fx management, intra-group loan management and intra-group netting.
Find out more and register today at www.windycitysummit.org
USA, April 2017
FTI Treasury launched its USA business development campaign for 2017 between January and April with client, network partner and contact meetings held in Chicago, Michigan, San Francisco and Kentucky. The proposed offering is for European and International Treasury Outsourcing and Consulting. Brochure here
Dublin, March 14 and 15 2017
FTI Treasury will run its bi-annual Dublin based training on Understanding Treasury Management in March. This training course is specifically targeted at people who are seeking to upgrade and deepen their understanding of treasury management, instruments and operations. Brochure here
Dublin Castle, January 24 2017
FTI Treasury attended the second European Financial Forum, a partnership between The Financial Times and IDA Ireland, bringing together international and Irish industry leaders, policy makers, regulators and subject matter experts to explore the various forces that are shaping the global financial services industry.
The theme was ‘Transformation and Reinvention in Uncertain Times’ and the added significance of Brexit and the new administration in the United States were underlying topics.
Some of the interesting messages presented by the high profile panel of speakers were:
Brexit will reshape financial services in Europe with other centres expanding to rebalance the indust
The launch by the Irish government of its action plan for 2017 under its International Financial Services IFS 2020 strategy, presents Ireland’s vision for the development of its international financial services sector, and promotes the country as the location of choice for financial services as a committed member of the European Union guaranteeing access to the European market, and as the only English speaking country in both the Eurozone and EU.
Two themes coming out of Davos - uncertainty arising from major political regime change, security and political events; and a sense of optimism with the dialogue moving away from deflation to inflation
The potential positive impact on the US economy of suggested tax cuts, deregulation and infrastructural investment supercharging the economy
Risks arising from geo-political uncertainty, the ability of the new US administration to execute policy objectives, and what happens around trade
Dodd Frank reform and its scope
The danger of regulatory fragmentation and protectionism creating a risk of reducing available pools of capital and liquidity
PSD2 and regulated access to bank data.
The landscape for surplus and operational corporate cash investments has changed dramatically as a result of negative interest rate environments and the regulatory impact on the demand for cash and the availability of investment products.
While typically corporate cash investment policy objectives are security, liquidity and return (in that order), having to pay for the privilege of holding cash with a financial institution does not sit well for many business people. However, the pursuit of solutions such as considering strategies around extending maturities, accessing risk/return profiles, looking at a wider range of products are being effected by regulatory reform.
The phase in arrangements for Basel III means that financial institutions have revised views of different sources of liquidity, and favour deposits that are not linked to day to day activities to have a tenor in excess of 30 days in order to facilitate their stress testing obligations under the regulatory framework. Bottom line – many banks don’t want your day to day excess cash which challenges the corporate treasury requirement to manage counterparty risk through diversification. Subsequently corporates need to better understand the profile of the cash they hold.
More info on Basel III phases: http://www.bis.org/bcbs/basel3/basel3_phase_in_arrangements.pdf
Money Market Fund reform, both in the US and Europe, is further evidence of the impact of regulation on traditional cash investment behaviour where MMFs were typically used as an established and routine daily cash investment option. MMF reform measures in the US include the eliminate of constant NAV funds and provides for the ability of fund managers to impose liquidity fees and redemption gates. The Financial Times reports that “As a result of the reform, more than $1tn has left prime and tax-exempt funds, with government funds proving the main beneficiary”.
European MMF reform has taken a different direction to the US and final agreement was made late in 2016 by the European Parliament, Commission and Council, the implementation period yet to be determined.
The changing landscape for corporate cash investments means that effective cash flow forecasting in the three month time horizon now has an increased level of significance. FTI Treasury has been working with our clients to revise cash investment policies and to offer an Integrated Cash Flow and Liquidity Forecasting Technology based Service, the main elements of which are:
A web-based cash flow forecasting tool, customised to meet specific needs
Online overview of how much and where you have liquidity
A team of specialists to implement, run and maintain the process
The ability to integrate data with core systems
Can facilitate group-wide currency exposure management and hedging.
Brussels, January 2017
Following on from the European Commission Review of EMIR Report released in November 2016 and with MIFID coming into effect in less than 12 months, there are a number of implications for corporate treasuries which should be monitored during the year.
The Commission’s review of EMIR determined that there would be “no fundamental change should be made to the nature of the core requirements of EMIR, which are integral to ensuring transparency and mitigating systemic risks in the derivatives markets”; but that “a number of areas were highlighted where the EMIR requirements could be adjusted”.
1st March 2017 – Variation Margin for Uncleared OTC Derivatives applies
The Margin Rules for uncleared OTC derivatives under the Level 2 Regulation comes into effect. Its application:
Corporates (NFC+, NFC-): Does not apply if OTC derivatives are hedging transactions, or if non-hedging transactions fall below the EMIR clearing threshold
FC - Financial Counterparty: Applies for credit institutions, MiFID firms, insurance undertakings, pension funds, UCITS and certain AIFs.
Variation Margins apply from 1st March 2017 and Initial Margins will be introduced over time.
Netting may apply if subject to an enforceable netting agreement.
Exemptions: Spot FX exempted. Temporary variation margin exemption applies to physically settled FX forwards.
3rd January 2018 – MiFID II and MiFIR takes effect
The Markets in Financial Instruments Directive (MiFID) is the EU legislation that regulates firms who provide services to clients linked to ‘financial instruments’ (shares, bonds, units in collective investment schemes and derivatives), and the venues where those instruments are traded. MiFID II and the accompanying Regulation MiFIR (Markets in Financial Instruments Regulation) represents an overhaul of the MiFID I and addresses:
Increased investor protection covering communication, disclosure and transparency in favor of investors
Alignment of regulation across the EU
Increased competition across the financial markets
Additional powers of supervision for the European Securities and Markets Authority (ESMA) relating to conduct of business.
3rd January 2018 - EMIR Delegated Regulations come into effect (in line with MiFID II)
FX Forwards settling in T+3 or later must be reported.
Commercial Purposes Exemption: Physically settled FX contracts will not be defined as a financial instruments under MIFID II and therefore will not be subject to EMIR if all of the following criteria are met:
At least one of the parties is an NFC.
The FX contract is used for identifiable goods, services and direct investment.
Not traded on a trading venue:
Regulated Market (MiFID I)
Multi-lateral Trading Facility (MiFID I)
Organised Trading Facility (MiFID II).
December 16 2016
As 2017 looms it is clear that corporate treasury will face a range of new and continuing challenges. While financial market volatility and the development of Brexit are key focus areas, further regulation, developments in international taxation and the continuing challenges of cyber risk, cash management, financing and financial risk management will take up significant attention. More info
Ireland, December 6 2016
Country by Country Reporting, “CbC reporting”, to the Irish Revenue must be completed by the last day of the fiscal year for which it relates e.g. for financial years ending 31 December 2016 .
Country by Country Reporting, “CbC reporting”, is part of Action 13 of the OECD/G20 Base Erosion and Profit Shifting (“BEPS”) Action Plan, the purpose of which is to enhance the transparency of tax administration on a global basis by enabling the assessment of transfer pricing risk and BEPS related risk. As Ireland has elected to be an early adopter of Action 13, CbC reporting has come into play for financial years beginning on or after 1 January 2016.
Who does it apply to?
CbC Reporting only applies to Irish companies that form part of a multinational group whose annual consolidated group revenue is in excess of €750 million in the preceding fiscal year.
What must be done?
Relevant companies are required to notify the Irish Revenue Commissioners of the status of the entity on an annual basis.
If the Irish entity is not the groups’ reporting entity then the Irish entity must notify the Revenue Commissioners of the identity and tax jurisdiction of the reporting entity who will file their CbC report. The notification to the Revenue must be completed, at the latest, by the last day of the fiscal year for which it relates e.g. for financial years ending 31 December 2016 the Revenue must be notified by the 31 December 2016. Notification is completed through ROS (revenue online system).
If the Irish entity is the groups’ reporting entity then the first CbC report must be filed 12 months after the period to which the report relates, so for financial years ending 31 December 2016 the first report must be filed by the 31 December 2017.
What information is included in the CbC report?
The detail to be reported on includes revenue, profits, taxes, number of employees among other important financial statistics for each tax jurisdiction in which the multi national group does business.
Failure to comply?
Failure to comply with the relevant reporting requirements or reporting incorrect or incomplete data could trigger a penalty of €19,045 with the possibility of further daily penalties being applied for each day thereafter that the correct report remains outstanding.
On 13th October 2016 the Revenue Commissioners published guidance in a FAQ document which provides a step by step guide to CbC notification. This can be accessed by following the below link:
FTI Treasury is currently recruiting a Treasury Front Office Specialist.
This is a great opportunity for an enthusiastic experienced treasury professional to join our growing team.
Full details and application process can be found here.
Dublin, November 23 2016
The CEO Forum, jointly hosted by Enterprise Ireland and Deloitte, is one of Ireland's principal business conferences and attracts key audiences of up to 400 senior business people and provides a forum for collaborative thinking, knowledge sharing and debate with political and business leaders. Pat Leavy, CEO of FTI Treasury, attended this invite only networking event.
The theme was, ‘Powered for Growth’, and focused on the key opportunities and challenges that companies are facing to grow their businesses so that they can look to lead scalable, innovative companies, capable of international growth and expansion.
Important messages from the conference were:
Claire Byrne’s opening remarks as Moderator compared last year’s ‘scent of optimism’ with this year as being the ‘meat between the sandwich of the known and unknown’.
Julie Sinnamon, Chief Executive Officer, Enterprise Ireland said that by 2030, 64% of the global middle class will be located in the AsiaPacific region. Julie also said that Brexit is a game changer for Irish industry and that their client firms were gathering the evidence to inform an appropriate response through driving the competitiveness agenda, going on the offensive and pursuit of innovation and a lean agenda.
Roger Fisk, US based Marketing and media strategist highlighted the need in business leadership for:
Clear understanding of value
Use organization values to navigate constant change.
Alan Brogan, CEO of Datalex identified core contributors of success as:
Put the customer in the center
You are only as good as the people in the organization
Survivors must respond to change.
Dublin, November 16 2016
Michael Delaney, Executive Director of FTI Treasury, represented the Company at the Irish Association of Corporate Treasurer’s annual Corporate Treasury and Cash Management Conference in Dublin.
Approximately 100 corporate treasurers joined a similar number of service providers to consider economic, market, taxation and treasury risks, challenges and opportunities.
The Conference was chaired by George Lee (RTE Economist and previous FTI Treasury colleague), who managed the contributions of over 20 guest speakers on a varied range of interesting topics.
Key issues considered included:
FTI Treasury is a founding member and patron of the Association and congratulate the organisers on another successful event.
Dublin, November 8 and 9 2016
FTI Treasury will run its bi-annual Dublin based training on Understanding Treasury Management in November. This training course is specifically targeted at people who are seeking to upgrade and deepen their understanding of treasury management, instruments and operations.
Washington, October 13 2016
U.S. Department of the Treasury announced final regulations aimed at addressing earnings stripping and the treatment of financial instruments that purport to be debt as equity. The Department has taken on board submissions in respect of cash pools and short term loans and is providing a broad exemption for both that are short term in form and substance. Companies will be permitted to treat short-term instruments issued among related parties in the ordinary course of business as debt.
Treasury has also relaxed the inter-company loan documentation requirements by extending the effective date of the document rules by one year to January 1 2018.
This is welcome news for treasury management operations. However, treasuries need to ensure that existing activities meet form and substance tests and appropriate documentation is put in place within the revised deadline. More Info
UPDATED: September 1 2016
On 23rd June 2016 the British public went to the polls to decide whether or not the United Kingdom should remain a member of the European Union. On 24th June the results revealed that the UK had voted to leave the EU by 52% to 48%.
The Brexit Treasury File aims to identify issues that have to be considered by companies from a corporate treasury management perspective. More Info
New York, August 15 2016
See Pat Leavy’s opinion on the discomfort of currency volatility in the board room published in Agenda, the Financial Times Service offering a boardroom resource platform and providing the most influential source of intelligence for today's corporate directors.
Pat says “Currency has become an uneasy word in the board room and ‘C’ suite”. Log on to http://www.agendaweek.com for a trial to view the article.
Dublin, July 28th 2016
FTI Treasury today received its SSAE 16 Type 2 Report from Grant Thornton for the period 1st September 2015 to 30th June 2016. It is a clean report and shows ‘no exceptions noted’.
Statement on Standards for Attestation Engagements (SSAE) No. 16, Reporting on Controls at a Service Organization, was established by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA). A Service Organization Control (SOC) report is an effective way for a service organization such as FTI Treasury to communicate information about its controls. A SOC 1 report focuses on controls at the service organization that would be useful to user entities and their auditors for the purpose of planning a financial statement audit of the user entity and evaluating internal control over financial reporting at the user entity. The SOC 1 report contains the service organization's system description, an assertion from management, and the independent service auditor opinion and report. There are two types of SOC 1 reports: Type I and Type II.
In a Type II report the service auditor expresses an opinion and report on the subject matter provided. Grant Thornton’s opinion for FTI Treasury controls is:
The description fairly presents the FTI Treasury risk operations using the its hosted system that was designed and implemented throughout the period from 1 September 2015 to 30 June 2016;
The controls related to the control objectives stated in the description were suitably designed to provide reasonable assurance that the control objectives would be achieved if the controls operated effectively throughout the period 1 September 2015 to 30 June 2016; and
The controls tested, which were those necessary to provide reasonable assurance that the control objectives stated in the description were achieved, operated effectively throughout the period 1 September 2015 to 30 June 2016.
Washington D.C., July 14 2016 (previously April 2016)
On Thursday 14th July a public hearing by the U. S. Treasury Department and Internal Revenue Service received input on the proposed regulations under Section 385 of the Internal Revenue Code regarding the re-characterization of certain debt instruments as equity.
Significant reaction against the proposed changes focused on the potential increase in liquidity cost and requests for exemptions, delayed implementation and the withdrawal of the rules.
The two most significant concerns from a corporate treasury perspective are the impact on using internal funding as a source of financing and the effect on cash pooling structures.
The expectation is that this Rule will be finalized by the end of the year.
Continue to watch this space
Dublin, July 8 2016
The FTI Treasury team will join Ireland’s tech community in coming together to raise funds for Temple Street, Ireland’s National Children's Hospital for specialist facilities for Paediatric Neurology and Renal Dialysis & Transplantation by participating in the T4TS treasure trail challenge.
Geneva, June 9-10 2016
FTI Treasury will participate in the 2016 Coprocess User Group Meeting in Geneva in June, providing the opportunity to enhance our partnership with Coprocess and to meet with other netting users. Coprocess netting is FTI’s netting system of choice and part of our strategy to use ‘best-in-breed’ technology to delivery our treasury outsourcing solutions.
South Bend, Indiana, May 2016
Following on from FTI Treasury’s collaboration with Notre Dame University in 2015, we welcome Peter Janiw as a 2016 summer intern to the company as part of the Notre Dame’s Irish Internship Programme. Peter will spend two months immersed in FTI and working alongside our team to gain valuable pragmatic experience.
Liverpool, May 18-20 2016
Pat Leavy, a Fellow of the Association of Corporate Treasurers, attended the ACT Annual Conference in Liverpool and noted the obvious concerns over Brexit and negative interest rates. A Standard and Poor’s downgrade of the UK sovereign credit rating and Sterling depreciation are immediate short term consequences of a vote in favour of Brexit on 23rd June. Corporate treasury needs to adjust for a significantly longer period of negative interest rates in major economic areas.
Boston, April 2016
FTI Treasury is a participant company of Ireland Gateway To Europe (IGTE), a not-for-profit collective of Irish service providers who showcase Ireland as Europe's premier investment location through events in the U.S. FTI was part of IGTE’s delegation to Boston where the highlights of the mission included the Boston College Club CEO breakfast, faculty lunch and campus tour and the IGTE Investment Summit that included Brian Halligan, Hubspot CEO and Congressman Richard Neal as speakers.
Michigan, Illinois, May 2016
Justin Callaghan, COO and Pat Leavy, CEO FTI Treasury met with a range of companies and clients in the states of Michigan and Illinois during May. A common set of concerns were expressed around Regulation 385, Brexit, technology integration and fraud and phishing.
Dublin, April 12-13 2016
FTI Treasury will run its bi-annual Dublin based training on Understanding Treasury Management on April 12th and 13th. This training course is specifically targeted at people who are seeking to upgrade and deepen their understanding of treasury management, instruments and operations.
Washington D.C April 2016
The U.S. Treasury Department has issued regulations under Section 385 of the Internal Revenue Code which have the potential of having significant consequences for multinational companies using cash pooling structures and providing inter-company financing.
The Code is intended to prevent corporate tax inversions and introduces a debt-equity characterization rule which could have the impact of reclassifying existing debt as equity. The effective date is April 4th 2016. Advocacy groups belief that the regulation has created unintended consequences and are lobbying the IRS to consider this matter further. Watch this issue carefully!
Dublin, February 2016
One of the requirement under the Companies Act 2014 in Ireland, which came into effect on 1st June 2015, is the requirement for all companies registered as “Private Limited by Shares” to convert to one of two types of new companies – LTD (Private Company limited by shares), or DAC (Designated Activity Company limited by shares). FTI is working with its clients who have treasury companies in Ireland to navigate the conversion process and the consequences. The deadline for conversion to a DAC is 31st August 2016 and to a LTD is 30th November 2016.
Dublin Castle, January 27 2016
FTI Treasury attended the inaugural Europe Financial Forum presented by the Financial Times (FT) in association with Enterprise Ireland. The Forum provided the opportunity for international decision makers to debate a range of challenges and issues facing the European and global financial services industry, particularly in respect of the European Financial System, Digital Disruption and the Global Payments Industry.
Dublin, January 2016
FTI Treasury is a Patron and founding member of the Irish Association of Corporate Treasurers and attended the annual patrons meeting in January. We encourage corporate treasury people in Ireland to become members and to support the Association’s comprehensive suite of events. The breakfast meetings address matters of particular corporate treasury interest.
London, December 14 2015
View the WEBchat discussion between FTI Treasury CEO, Pat Leavy, and Jack Large of CTMfile on the realities of treasury outsourcing – drivers, benefits, concerns and mitigations and the future of treasury outsourcing.