International regulation and representation

With seismic events in Europe, a new era of government in the UK and passing of the financial reform bills in the USA, it would be easy for me to spend a few minutes on each of these significant events.

Given the media coverage I don’t think you need yet another view! Suffice to say that the ACT continues to monitor and influence on the regulation front. We remain concerned that political motivations may stop sensible exemptions or protection being passed into law to protect the non-financial sector for fear that politicians who seek exemptions may be seen as weak on banks.

It is inevitable that risk management processes will be tested by the € stress – if your company does encounter problems the first action must be to fix the issue. The second is to learn from the event and ensure that processes evolve to cater for the unexpected because if there is one thing that we are learning and can demonstrate to our boards is that we live in surprising times and not all of them are nice ones.

The European Association of Corporate Treasurers (EACT) met in Prague recently. There is no doubt that this group of 20 European treasury associations has worked well together, and with many companies across Europe, to persuade Brussels and others that the move to clear all derivatives via central clearing houses is less than sensible. There is more work to do and the ACT is committed to working with and supporting the EACT.

The EACT is also working hard on other significant financial challenges:

• it is part of the European payments Council (EPC) working on IBAN and the BIC. Please find time to complete the questionnaire at http://bit.ly/bGmH8Y
• New remittance information standards as proposed by EACT have been accepted by the EPC – details are available at http://eact.eu

The work the ACT does to lobby or educate the authorities and regulators tends to be focused on the UK and Brussels but with growing numbers of members and students based outside the UK we need to assess what we do for our membership. We can, in conjunction with a national treasury association, help those of you who operate overseas to nudge your appropriate authorities in the right direction. At the simplest this might be from papers that have been included on the ACT website or as part of a discussion between the ACT team and yourselves. The ACT has over 1,300 members and students based around the world and in each of Australia, Hong Kong, Ireland, Singapore, South Africa and the USA we have (on average) over 100 members and students.

We have active ACT member groups throughout the UK and have seen the establishment of networks across the Middle East over the last 18 months. We have included an on-line version of The Treasurer magazine to the website but we know that we must do more to ensure that ACT members are an effective voice for the treasury profession wherever they are based. You can be assured that we will do more to develop networks and interaction where there is demand.

We also work with many other professional, educational and other bodies – in the past year or so I have met around 40 such institutions. We work with some on a regular basis but there are others where we have identified areas that we should be doing more together, including internationally. Two new relationships have been forged in recent months with the Non Executive Directors’ Association (NEDA) where we are a strategic partner and another UK association for non-executive directors (ITNEA) with whom we have developed a regular and ongoing dialogue with NED’s focused on treasury issues.

Our next Annual Pensions Conference will take place on 1 July, and with a very strong programme this year, we encourage members and their colleagues to book their place. Picking up on a range of highly topical issues – from longevity hedging and how to approach recovery plans to new investment strategies and the role of pension trustees – speakers include Martin Bird, Head of Longevity & Risk Solutions at Hewitt, John Chilman, Group Reward & Pensions Director at FirstGroup, and Robin Claessens, CEO of the Invensys Pension Scheme. Full details are available at www.treasurers.org/pensions2010

Ugly rumour – at least I hope it is only that!

We were called recently to see if we would comment on a rumour that some banks that find themselves locked into loan facilities were appointing lawyers, on a contingency basis, to scour loan documentation and related company information looking for breaches that could be used to renegotiate or exit the facilities. I had not heard of such aggressive action but I would ask members if they are aware of such behaviour to let us know.

By Stuart Siddall