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New Treasury Module

Introducing Treasury Management Qualifications in SA!
By Joseph Busha

reasury management is central to the financial operational activities of an organization – from social clubs to business organizations. But, to be a treasury manager or a treasurer there is no pre requisite and recognized professional qualification such as those required for one to become a certified chartered accountant (CA), chartered financial analyst (CFA) or actuary. Only qualification by “experience” in treasury operational activities has been the passport for one to become a treasurer – without standardized assessment. So what is treasury management or a treasurer?

“Treasury management is the continuous management of an organization’s cashflows; financial instruments’ investment, funding and trading activities both in domestic and foreign currency and the risks thereof; and other inherent operational risks”.

This is how I would define treasury management. A simple definition, it would appear. However, to illustrate that the definition or description of treasury management is not that simple or obvious – a few treasury professionals were asked for a concise definition. Below, are a few definitions:

  • “Treasury management is the safeguarding and creation of value through adept management of an organization’s cash flows, borrowings, investments and financial risks” – Neal Anderson, Managing Director, Tanquanta Treasury Solutions.
  • “Treasury management is the heart of any organization” – Herbert Peter, Accounts Executive, Andisa Treasury Solutions.
  • “Treasury management is the management of the cash assets and liabilities of a business. It includes the quantification of the funding needs as well as the foreign exchange and interest rate risks of the business and embraces all activities associated with the procurement of funds on the most appropriate basis and the advantageous terms, the control and investment of cash resources, the purchase and sale of foreign currency, determining the most appropriate methods of hedging the interest rate and foreign exchange risks of the businesses and implementing strategies to manage those activities on a day to day basis” – Chris Sinclaire, Group Treasurer, AECI Limited.
  • “Treasury management is management of the liquidity of a business to ensure that the right amount of funds are available in the right currency at the right time in the right place” – Vaughan Firman, Network Healthcare Holdings Limited.

The definitions are similar and capture the essence of treasury management. There must be a standard approach and framework that can be adopted by all involved treasury management. Hence, a specialized treasury management training and education would bring about this. To this end, the Association of Corporate Treasurers of Southern Africa (ACTSA) is working on introducing professional treasury management qualifications at three levels: one intermediate certificate and two advanced certificates. The proposed certificates are:

  • A Course in Treasury Management
  • Advanced Treasury Management Diploma
  • Certified Treasurer Certificate

A treasury management department usually consists of three departments – Front Office (that carries out financial instruments trading or dealing activities), Middle Office (risk management activities) and Back Office (settlement and administration activities including accounting and taxation). The courses, which are aimed at equipping a treasury manager not only with cash management skills but also with risk and human resource management skills, would be useful to many. The introductory course in Treasury Management will be offered in association with the South African Institute of Financial Markets (SAIFM) and will be called RPE Treasury Management. The modules to be completed for proposed for the RPE Treasury Management course are:

  1. The South African Money Market
  2. Bond and long-term debt market
  3. The equity market
  4. Introduction to the Forex Market
  5. Treasury Management
  6. Financial Mathematics and Derivatives: An Introduction

It is hoped that the courses and training in treasury management will enhance the understanding of treasury management activities within the industry, and a standard framework. Any comments and suggestions on the proposed courses and training can be directed to Lily Mitchell at lily@actsa.org.za or Joseph Busha at joseph@jmbusha.co.za. Education is power!

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