The Treasurer November 2014

Editor's Letter

What’s the biggest challenge facing treasurers in 2015? Well, according to a poll of the audience undertaken at the ACT Corporate Funding Conference in October, it’s that familiar bugbear – regulation. What a surprise.

For many years now, corporate treasurers have been trying to wrestle with the tidal wave of regulation that has swept over the financial services sector since the financial crisis. While most of it has not been intended to directly impact on corporates, it has invariably ended up indirectly impacting on them to some extent. The requirement to report derivative trades under the European Market Infrastructure Regulation has been a particular headache, for example.

Treasurers worry about regulation – a lot.

And it is evident from the ACT’s poll that this preoccupation is not about to end any time soon.
So what exactly has been the impact of regulation on the real economy? This is the issue that we examine in detail in our cover feature, starting on page 18. Obviously, regulation is a huge area, so it is impossible to explore it in depth in just a few pages, but hopefully we can give you a good overview of where the main pain points lie. I am very keen to hear your views on the rules that have been causing you most trouble in practice. Please do write in and let me know your thoughts.

Also in this issue, we meet Chris King, group treasurer of private equity-backed foam manufacturer the Vita Group. He talks about his involvement in the Vita Group’s large-scale divestment programme, and the challenges that come with preparing a group for the exit of its owner, on page 22.

Many treasurers will be familiar with the US private placement market, but fewer will know much about its German equivalent, the Schuldschein market. Schuldschein loans are a popular, mainstream financing tool in Germany and Austria, but they are also beginning to attract the attention of international corporates. We discover the reasons for their appeal, on page 26.

Translation risk will also be on the agenda of many UK treasurers due to the string of companies with international revenues that have been affected by currency volatility and the unexpectedly rapid strengthening of the pound. We examine this issue in depth, on page 36.

I hope you enjoy this issue of The Treasurer and I wish those of you who are attending the ACT’s Annual Dinner this month a very enjoyable evening.

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