Questions
Question 1
You are the controlling shareholder of the Dragon Semicon company based in Taiwan, a company with strong growth potential. In order to fund
future growth, you are considering listing the company stock either on the New York or the London Stock exchange. Visit the website of the two
exchanges (www.nyse.com and www.londonstockexchange.com) and compare their listing and disclosure requirements for foreign companies.
Where would you list the company and why? Please provide specific arguments to support your response.
Question 2
You are the controlling shareholder of the Dragon Semicon company based in Taiwan, a company with strong growth potential. In order to fund future growth, you are considering listing the company stock either on the New York or the London Stock exchange. Visit the website of the two exchanges (www.nyse.com andwww.londonstockexchange.com) and compare their listing and disclosure requirements for foreign companies.
Where would you list the company and why? Please provide specific arguments to support your response.
After reviewing the listing and disclosure requirements for foreign companies, I chose to list the Dragon Semicon company with the New York Stock exchange due to the requirements posted on the NYSE site. The NYSE regulations states that under Section 110 of the Company Guide, the exchange will consider the laws, customs and practices of the company's country of domicile, to the extent that those laws are not conflicting with federal securities laws including those under the Securities Exchange Act of 1934. Dragon Semicon must also provide an English language disclosure if the company's corporate governance practices differ from those followed by domestic companies under the Exchange's standards. The disclosure may be from the company's website or its annual report filed with the SEC inclusive of audited financial statements. Shares of foreign companies are listed as American Depository Receipts (ADRs), with an acceptable American bank or trust company and should provide release of shares, interchangeability, dividends, distribution and reports, certificates, actual foreign shares, actual foreign shares, citizenship restrictions, and disclosure. Listed companies are required to have an annual shareholders' meeting each fiscal year and three definitive copies of all proxy materials are sent to any security holder. Effective February 1, 2015, there was a change to the corporate governance requirement where listed companies are now required to file an Annual Affirmation each calendar year that is due no later than 30 days after the company's annual shareholder's meeting. There is also a requirement for CEO certification where a listed company's CEO is required to certify to the Exchange each year that he or she is not aware of any violation by the listed company of exchange corporate governance listing standards. I feel my firm will be able to provide the necessary information to be compliant with NYSE regulations.
Reference:
N/A, Retrieved June 2, 2015 from www.nyse.com
Question 3
Create 3 best practices that any multinational corporation could apply to multinational cash management. Describe each in detail and support your statements with arguments. Cite your sources.
Question 4
Create 3 best practices that any multinational corporation could apply to multinational cash management. Describe each in detail and support your statements with arguments. Cite your sources.
Cash flow management entails collecting payments, controlling disbursements, covering shortfalls, forecasting cash needs, investing idle funds, and compensating the banks that support these actions. Global cash management is concentrated around highly taxed and accounting processes; therefore working partnerships between the tax and accounting teams are important. Another important aspect of cash flow management is the coordination between treasury and operations to ensure funds are invested wisely with the use of electronic tools that gather diverse financial information that are formatted into reports and used to make important financial decisions.
Best practices management is known to be efficient when every dollar is at work between covering payments or producing income but can be better managed with sound practices to ensure efficiency. The first best practice that can ensure sound practices are selecting core cash management banking partners that offer automated processes such as payroll and accounts payable along with electronic data interchange (EDI), resulting in affordable outsourcing and protection against theft or fraud. The second best practice is to develop accurate cash forecasting models to protect against uncertainties and to match incoming receipts with disbursements. Forecast should be divided into short term, medium term, and long term to track how well the company is doing. Integrating information into a forecast using a rolling format for continuous updates helps companies time disbursements to meet incoming receipts and improves forecasting accuracy and helps weather cash-critical periods. The third best practice is improving investment yields at lowest cost that is clearly defined via a written investment policy that stipulates objectives, guidelines, and acceptable investments. This document will provide a corporate understanding for directors and investment managers in establishing a portfolio and in deciding investment decisions as those opportunities present themselves. I must also add that companies must review their cash management system regularly to identify process improvements.