FX and payments
A business that sells in euros and pays its costs in sterling can lose its margin to the exchange rate before the invoice is paid. A fund that offers share classes in other currencies carries a similar exposure in each class. Most are offered one provider’s standard product at that provider’s price.
We start with the flows. We need to know what is paid and received, in which currencies and how far ahead the amounts are known. From there we work out what the business needs and which providers will offer it on terms that suit.
Hedging covers spot and limit orders, forwards, swaps and options. It includes non deliverable forwards for restricted currencies and share class hedging for funds. Some providers will agree forward lines without margin for a business with the balance sheet to support it. We also help boards put a hedging policy in writing.
Payments covers multi currency accounts with local account details and collection accounts in most major markets. It covers mass payments by file or API and delivery in exotic and emerging market currencies. These are the routes used by businesses that buy or sell abroad, pay staff overseas or collect from customers in several countries.
The provider carries out the hedging and the payments under its own authorisation. We do not execute transactions or hold client money.