1 min readIn May, several Treasury conferences from Oregon to Massachusetts had well-attended sessions on investment policy design and construction. This interest may have been sparked by upcoming regulatory changes affecting bank deposits and money market funds, as the risk/reward nature of these investments is under review and likely to change. A robust investment policy enables controlled…
2 min readExecutive Summary The complementary use of commingled and separate accounts may help in optimizing corporate cash management. The percentage of corporate investors considering money market funds as permissible investments has been declining since 2009, while the permissible use of separately managed accounts has been climbing. Six Advantages of Separately Managed Accounts: Tailored Risk Management Transparency…
2 min readResults from the Capital Advisors Group/Strategic Treasurer 2012 Liquidity Risk Survey, to be released later this month, portend the shifting regulatory environment will significantly impact investment vehicle preferences for corporate cash managers. The survey results remind us that changing regulations can be a major catalyst in modifying investor behavior. After the Lehman bankruptcy, regulators deployed…
3 min readAbstract We propose a variable Net Asset Value (NAV) approach based on a dual-NAV structure to preserve the transactional utility of money market funds. This approach would require funds to publish daily intrinsic NAVs up to the 4th decimal place, and would allow shares to be traded at rounded NAVs (RNAVs) up to the 2nd…
1 min readAbstract Recent developments in corporate cash investments resulted in portfolios of different risk characteristics having little yield differentiation. Popular cash vehicles, including prime money market funds, FDIC-insured transactional accounts and all-Treasury portfolios, require a fresh look in this new environment. Improving a portfolio’s risk/reward profile may involve diversification among cash vehicles, liquidity and maturity structures,…
2 min readPortfolio examinations are typical activities for this time of year as year-end audits get underway. What may come as a surprise, however, is the additional scrutiny on valuation methodology that auditors are requesting. Supporting our clients for this additional scrutiny reminds us of the benefits that may be achieved through our broader Credit/Risk Management Oversight…
2 min readIntroduction One short year ago, we discussed three key trends for 2011: low interest rates, a spreading sovereign debt crisis and persistent financial regulation. And we started our 2011 commentary with the phrase, “meet the New Year, same as the old.” Have we caught you in a moment of déjà vu? For 2012, we see…
3 min readThe New Year has a way of prompting us to focus on priorities and agendas for the coming 12 months and as Treasurers plan their “To Do” lists for 2012, it is helpful to identify trends and events that will shape the short-term cash management environment. A view of the potential issues that could develop…
1 min readAs a business looks for strategic opportunities to deploy its cash, maintaining liquidity in its cash investment accounts is crucial. Money market funds have been the traditional answer to liquidity, but their engineered liquidity has come under scrutiny from both investors and regulators alike. Potential regulatory changes announced by the SEC on November 7 may…
3 min readAbstract For four decades, many corporate treasurers successfully employed a hands-off approach to managing the money market funds in their portfolios. However, recent market events revealed the danger in this approach. Like other investments, money market funds must be evaluated to determine how they fit into a firm’s overall risk management strategy. A money market…