AFP Blogs

On February 25th, the Department of Labor’s Employee Benefits Security Administration released a final rule establishing a civil penalty of up to $1,100 per day against multiemployer plans in endangered or critical funding status that fail to establish mandatory funding improvement and rehabilitation plans.

“The regulation makes clear that the $1,100/day penalty can be reduced or waived based on mitigating circumstances, in particular the severity or willfulness of the violation,” Judith F. Mazo, senior vice president and director of research for the Segal Co., told BNA Feb. 25.

The rule is effective March 29 for plan years beginning on or after Jan. 1, 2008 and is expected to be published in the Feb. 26 Federal Register.

At the Credit Card National Association’s annual government affairs conference held this week, House Financial Services Committee Chairman Barney Frank (D-Mass.) suggested that there it is unlikely that legislative action will be taken in 2010 that would limit interchange fees on credit cards and other payment cards.

According to a recent PwC IFRS survey, nearly 50% of US-based multinational companies are either currently using IFRS somewhere in the world, have completed an initial impact assessment, or are planning to do an assessment.

This week Federal Reserve Chairman Ben Bernanke signaled that the central bank would not change its key interest rate policy in the near term. Chairman Bernanke indicated that the current zero to 0.25 percent target range for the federal funds rate will remain in place for some time to come. He cited ongoing labor market problems and low inflation as reasons to maintain such a position despite continuing signs of broader economic improvements.

At the SEC’s open meeting held this week, the Commissioners gave its staff approval to begin a work plan to study whether the US should move toward adoption of a global accounting standard.  The Commission is looking for the staff to report back their findings in 2011 before making a decision on whether the US will formally adopt IFRS.  The work plan will consider factors necessary to determine whether, how and when a transition would occur.  Factors that the staff will consider include analyzing the regulatory, legal, educational, transitional and other pertinent issues that would be encountered should the US adopt.   

The Commission clarified that the staff’s workplan should not be viewed as a prescriptive resolution where all the items must be checked off  before the Commission can make a decision.  Rather, the workplan outlines the staff’s strategy for analyzing the various issues that can affect adoption.  The 2011 date discussed today in the open meeting is on course with the date set in the original roadmap previously issued.

The SEC will be hosting an open public seminar to help companies and preparers understand reporting using eXtensible Business Reporting Language (XBRL).  The seminar will be held on March 23rd at their Washington, DC headquarters starting at 1 p.m.   It will also be webcasted through the SEC’s site.  You can also submit questions and topics of interest on the subject ahead of time through their website.

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Condoleezza Rice, 66th Secretary of State of the United States

AFP is pleased to present a world renowned leader and best-selling author at this November’s AFP Annual Conference in San Antonio. With her unparalleled expertise on global affairs, national security and education, we are pleased to announce that Dr. Condoleezza Rice will share her experiences as Secretary of State as our Opening Keynote Speaker. Malcolm Gladwell, our Tuesday General Keynote Speaker and best-selling author of Blink and Outliers, will take new ideas in the social sciences and make them understandable, practical and valuable to business.

Condoleezza Rice

The AFP Annual Conference Task Force, made up of treasury and finance professionals from a variety of industries, recently met to put together an impressive program addressing the issues most strongly impacting their organizations. Choosing from a record number of session proposals, this team focused on relevant topics that include risk management, payments issues, technology, global expansion, capital structure and markets, and working capital management.

I hope you’ll join us in San Antonio, November 7-10 for what is sure to be the most important event for treasury and finance.

At this week’s meeting, FASB tentatively decided to delay the effective date of planned new rules on financial instruments for private banks and other private enterprises that have consolidated total assets of less than $1 billion. Such entitities could have up to a four year deferral period. However, they would be required to make certain disclosures regarding the fair values of loans at their exit prices. The FASB and IASB are still not yet converged in their proposed methodology but do plan to formally issue draft accounting standards on fiancial instruments by March 31 with the final rules issued by the end of the year.

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While Washington, D.C., and most of the northeastern United States tries to get back on its feet after suffering through what has been the snowiest winter since William McKinley was president, the rest of the world was focused on events in Europe (specifically Greece), and China.

Signs that the European Union (EU) will provide some sort of support and aid to Greece was enough to create a bit of a floor for the troubled sovereign credit and the Euro itself. After the freefall of credit spreads, CDS, equities, commodities and currencies over the past couple of weeks, this week actually seems calm.

We will have to take a wait-and-see approach to developments in Europe. How the EU would response to a further deterioration of the situation is foremost on people’s minds.

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Back in 2002, when the University of Maryland was making its run at the NCAA men’s basketball championship, the term “Fear the Turtle” became popular. It was a reference to the less-than-frightening school mascot, the Terrapin. This week, a significantly more frightening chant heard around the world, which was “Fear the PIGS”. With the “PIGS” being a reference to the countries of Portugal, Ireland and Italy, Greece and Spain.

We witnessed a great bit of uncertainty in the global markets as participants around the world were greatly concerned about the potential of a credit event in one or more of these European Community members. We watched as absolute credit spreads and credit default spreads continued to widen and as debt and equity deals were delayed and postponed.

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