Corporate Treasury Best Practices

//Corporate Treasury Best Practices
Corporate Treasury Best Practices 2017-09-19T20:12:14+00:00

Corporate Treasury Best Practices were developed by corporate treasurers, money market fund veterans and risk management specialists to provide institutional cash traders benchmark treasury practices.

These processes are technological advances designed to adhere to the traditional treasury principles guiding preservation of capital, liquidity, and yield.

DIVERSIFY

MONEY MARKET FUNDS ARE INHERENTLY DIVERSIFIED

Multiple money market funds further diversify short-term investment portfolios and optimally reduce credit and liquidity risk.

Treasury Strategies (TSI), a leading treasury management consulting firm, developed money market fund-specific, analytics-based compliance guideline ranges. These best practice recommendations are based on research that incorporated TSI’s professional expertise, proprietary database, extensive corporate interviews, and market research.

ANALYZE

ON-DEMAND PORTFOLIO & COUNTRY EXPOSURE ANALYTICS

The demand for dynamic intelligence by corporate treasury has brought about advanced exposure analytics for money market funds. Applied properly, exposure analytics can provide deep visibility into these funds and their counterparties.

Important portfolio metrics such as WAM, WAL, average seven-day-yield, fund size, fund sponsor, CDS spreads, equity pricing, credit ratings and financial summaries are expressly available to treasury clients. These analytic applications can expedite the due diligence process providing on-demand visibility into counterparty and country exposure across investment portfolios.

COMPLY

COMPLIANCE IS AT THE CENTER OF SOUND TREASURY PRACTICE

Corporate Investment Guidelines are literally the specifications and policy parameters for directing corporate treasury investment.

Compliance is an important component after each step in the money market fund investment cycle. Compliance guidelines should be re-evaluated on a regular basis.

OPTIMIZE

ANALYTICS ENABLES TREASURERS TO OBTAIN A HIGHER YIELD

Leveraging exposure analytics intelligence enables treasurers to obtain higher yields while remaining in compliance.

By using exposure analytics applications to run “what-if” scenarios, corporate treasury can identify optimal money market fund portfolios based on their corporate investment objectives and risk tolerance.

These and other optimization opportunities can be pursued once portfolios are properly diversified, positions are analyzed and compliance is achieved.

ARCHIVE

RISK ARCHIVE SYSTEM – MONTHLY SUMMARY, COMPLIANCE, DECISION SUPPORT, REFERENCE TOOL

Treasury departments require documentation systems for archiving month-end exposure report positions and verifying portfolio compliance. A risk archive system is one that provides critical MMF summary documentation, decision support reference and is a valuable internal presentation tool.

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