At the Association of Corporate Treasurers Cash Management in London last week a panel made up of Maurice Cleaves - Barclays, Ian Armstrong - AMEC, Angela Clark - Misys, and Paul Outridge - De La Rue and the audience generated some useful tips and insights into the current state of play in global cash pooling and sweeping:

• the majority of the audience (39%) use a combination of pooling and ZBA sweeping
• De La Rue uses a combination of sweeping and then netting the balance of their USD and GBP while  Amec sweeps all cash back to UK with no pooling
• notional pools are easier to manage but involve complex documentation, which can make them impractical
•  audience thought the factors most important in deciding whether and how to sweep and pool were:
  • regulations and tax: 49%
  • getting buy-in of local business units: 17%
  • counter-party risk: 9%
  • country risk: 16%
  • documentation: 8%
• beware of trying to use pooling and sweeping in situations, where thethis moment sums and savings are too small or just too complex when a simple sweep occasionally would be far more effective
• the administrative savings in the corporate treasury department from an automated sweeping/pooling system are a major reason for setting up such systems, e.g. De La Rue have reduced the management of their sweeping and pooling arrangement to just one hour/day
• other reasons for NOT using pooling are:
  • complexity and the current low % environment
  • use automated sweeping to remove cash balances from certain countries
  • only small amounts and banks charges are prohibitive
• is there a trade off between full % and partial % set-off?
  • full % set-off and cross guarantees is worth it
  • ⁃we avoid partial off-set, not worth it
• none of the panel and the audience appeared to have incorporated the potential pooling and sweeping benefits of SEPA into their solutions
• savings from the panelists' sweeping and pooling solutions are significant:
  • Amec: 150 bps and significant administration savings
  • Misys: reduced working capital by $10m
  • De La Rue: saved $10m and administrative savings.