Canadian Treasurer

January 25, 2011

International Cash Distributors (ICD) expands Canadian operation

By Robin Arnfield

Canadian natural resource companies with excess cash to invest have spurred San Francisco, California-based Institutional Cash Distributors (ICD) to expand its distribution and sales operations in Canada.

ICD operates a money fund portal for short-term institutional investment. From bases in San Francisco, California, Golden, Colorado, and London, UK, ICD says it services US$55 billion in assets worldwide.

ICD is registered with security regulators to operate as a trading portal in Ontario, BC, Quebec, and Alberta. “We are the only web-based cash trading portal to be registered in Canada,” Jim Etten, Vice President of Business Development, Canada at ICD, tells Canadian Treasurer.

As well as acting as a trading portal, ICD provides an analytical tool, Transparency Plus, which provides corporations with a live detailed view of their underlying investments and exposure.

Mr Etten was speaking to Canadian Treasurer from Calgary Airport after visiting Canadian resource and energy companies along with Jeff Jellison, CEO of ICD.

Mr Etten is a 14-year veteran of the cash investment business, with a decade of experience working with Canadian corporations.

Besides providing trading services, ICD acts as a voice for the opinion of money market fund (MMF) investors. In January 2011, ICD released a survey of corporate treasurers in response to the Money Market Fund Reform Options, which were detailed in the Report of US President Obama’s Working Group (PWG) on Financial Markets. According to the results of the ICD survey, most large corporations do not want many of the reforms proposed in the PWG report and are satisfied with the regulation already instituted by the SEC.

The purpose of the proposed reforms is to strengthen MMFs against another market run similar to the one that occurred in September 2008. At that point, a run on a fund called the Reserve Primary Fund helped precipitate a market run. The Reserve Primary Fund had been heavily exposed to Lehman Brothers debt.

A major feature of the reforms is the introduction of the floating net asset value (NAV), which would see the principal value of corporate money market investments fluctuate with underlying debt valuations held by the fund. This response garnered the strongest negative response as the fluctuating NAV would put corporations out of compliance, ICD says. However, this market valuation of fund assets could contribute to helping to prevent sudden runs, the PWG says.

“The floating NAV would create accounting complications because fund principal gains and losses would have to be marked to the profits and loss account,” Mr Jellison says. “Canadian companies would be affected as much as US companies, not just because they invest in US funds, but also because the legislation would ultimately influence regional best practices."

Mr Jellison thinks treasurers would rather have the necessary tools to control their own risk exposure, than to be further restrained by over-regulation.



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