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Forward Foreign Exchange Purchase and Sale

Overview

The Forward Foreign Exchange Purchase and Sale is a transaction where ABC and a customer enter into a Forward Foreign Exchange Purchase and Sale agreement under which the transaction is settled in the agreed foreign currency, amount and exchange rate on a specified date or during a specified period in the future.

Features

Help the customer hedge against foreign exchange risk and preserve the value of currencies.

Procedures

1. The customer submits to ABC the commercial documents and relevant vouchers.

2. ABC and the customer enter into the Master Agreement on Forward Foreign Exchange Purchase/Sale. For subsequent transactions under the master agreement, the customer may only submit the Forward Foreign Exchange Purchase/Sale Application.

3. The customer completes settlement with ABC on the specified date.

Tips

1. The Forward Foreign Exchange Purchase and Sale is divided into fixed forward transactions and optional forward transactions. In a fixed forward transaction, the date of settlement is fixed. In an optional forward transaction, the customer may settle the transaction on any working day within the specified period of time. It differs from the fixed forward transaction in the flexibility of settlement date, offering forward hedging to customers who are not certain about the date of payment /receipt.

2. The Forward Foreign Exchange Purchase and Sale applies to such major currencies as U.S. dollar, Euro, Japanese yen, Hong Kong dollar, Australian dollar, Swiss franc and Danish krone.

3. Settlement period. Standard settlement periods are available for 7 days, 20 days, 1 month, 2 months, 3 months, 4 months, 5 months, 6 months, 7 months, 8 months, 9 months, 10 months, 11 months, 12 months, 18 months and 24 months. The settlement date for the Forward Foreign Exchange Purchase and Sale is the expiry date of the agreed settlement period starting on the date when the Forward Foreign Exchange Purchase/Sale Application is concluded. If the settlement date falls on a holiday, it will be extended to the next working day.

Note: Please contact your local branch for detailed information about the service.

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