Tax Reform Requires Brain Power

Blog Post

Tax Reform Requires Brain Power

The May issue of iTreasurer explores the effort that will be needed to decode the recent tax law changes, as well as how financial companies are racing to embrace technology to help in areas like payments and just about all lines of business. In between we take a look at SWIFT’s partnership with SAP and summarize two panel discussions led by NeuGroup’s Anne Friberg that took place at a recent EuroFinance conference in San Francisco.
 
Starting on page 1, iTreasurer delves into some of the tax provisions that went into effect at the end of last year. While it’s a boon for corporates in the long run, realizing that boon will involve a high degree of brain-racking. That’s because the law isn’t fully formed, and many, many questions remain. As members of NeuGroup’s Treasurers’ Group of Thirty have been told, “only limited guidance [has] been released as of mid-March, mainly concerning MNCs’ repatriation tax” and “regulations to clarify other key provisions probably will not start arriving until summer or fall, at the earliest.” So there is a ways to go before details get ironed out.
 
In “Anticipated Exposures” on pages 4-5, iTreasurer looks at how borrower-friendly covenant-lite loans will help some companies in a downturn; how separately managed accounts are still gaining fans despite new short-term products and a smallish return on money market funds; and why companies need capital-allocation frameworks.
 
On page 6, we look at global financial messaging service SWIFT’s recent announcement that it has reached an agreement with SAP to allow corporate clients of the business-software giant’s S/4HANA ERP offering to directly access the global messaging service’s vast network of banks, without intermediaries or the operational challenges of an in-house solution.
 
May’s peer group meeting summary gives insight into NeuGroup’s FX Managers’ Peer Group “summit” which brought together both the FXMPG and FXMPG2 peer groups. This year’s summit topics included an in-depth look at dashboards, the headaches of trading restricted currencies, the implications of new hedge accounting rules and the effects of US tax reform.
 
On page 11, iTreasurer looks at the continuing détente that is occurring between banks and their up-and-coming friends, fintechs. This is becoming increasingly evident in the payments space as well as in areas such as data, artificial intelligence, open banking, client networks, security, crime prevention and identity protection.
 
“Fintech is really exciting for us,” said Joanne Towers, head of payments product for Europe, global liquidity and cash management at HSBC. “At HSBC, we partner with fintech to allow us to strengthen our solutions with more integrated propositions.”
 
Finally, on page 15, contributor Anne Friberg gives an update on EuroFinance’s recent “Managing International Growth” conference in San Francisco, the target audience for which was fast-growing companies on the West Coast. Ms. Friberg moderated two panels on topics that are important to those fast-growing firms: FX risk management and M&A.
 
For over 20 years, iTreasurer has delivered intelligence for treasurers. Based on exclusive access to senior treasury executives who are members of The NeuGroup Network of treasury peer groups, iTreasurer takes their real-world experience to produce articles, case studies and reports that are specifically meaningful to treasury best practice. www.iTreasurer.com.
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