Dealing with hidden provisions of new financial regulation.

• Author: Gallanis, Mike
• Position: TREASURY

THOUGH MANY OF THE RULES FOR THE DODD-FRANK ACT ARE YET TO BE WRITTEN, DEEP INSIDE ITS 2, 300 PAGES ARE MANY HINTS OF WHAT'S TO COME. ELIMINATE SURPRISES BY KNOWING WHAT'S AHEAD IN ORDER TO TAKE ADVANTAGE OF NEW OPPORTUNITIES.

For some time, treasurers have been anticipating regulatory reform and wondering how it will affect, among other things, their profits, risk, investments, bank relationships and global growth plans. The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act created a small measure of clarity, but many of the details are yet to be determined.

As a result of Dodd-Frank, 10 different regulatory agencies are now developing approximately 500 new rules required by the law. To provide some perspective on how massive that is, the Sarbanes Oxley Act of 2002 required just 16 new rules--and it had financial and accounting executives working long hours for several years to achieve compliance.

The following analysis of Dodd-Frank and other new global regulations identifies 13 measures that can directly affect a corporate treasury. There are three words that best summarize these measures: Massive, intrusive and global.

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* Massive. The regulations cover all aspects of the financial markets and alter the flow of capital.

* Intrusive. The breadth and depth of the new rules will effectively trigger a complete reorganization of business practices and will demand treasury to focus on more compliance, more reporting and prescriptive risk mitigation.

* Global. Jurisdictions throughout the world will have to tighten regulatory requirements.

Taken together, these changes create tremendous uncertainty in the financial markets. The costs of capital, credit and transaction services will all rise as these regulations and their consequences--both intended and unintended--filter through the marketplace.

Treasurers are acutely aware of the handful of regulations that will directly impact their businesses. However, it's important to stay aware of all areas of regulatory change and be prepared for those that could potentially impact treasury. Like an alligator in a swamp, any one of these regulations could jump up and attack an unsuspecting treasury organization. Each of the 13 areas listed below could potentially impact corporate treasury:

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