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Client priorities

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The Global Markets Specialist determines that the client has a number of priorities:

  1. They would like to ensure a smooth and efficient payment method for all their EUR payments for the imports of the barrels.
  2. They would like the ability to hold the various currencies in different foreign currency accounts and convert them when it is suitable for them.
  3. They would like some recommendations on hedging their Foreign exchange risk on the export side of the business.
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Commbiz Markets

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The Global Markets Specialist introduces the client to the Digital Channels Sales Specialist who provides the client with a demonstration of Commbiz Markets.

They reassure the client that their banker can open three foreign currency accounts denominated in EUR, CAD and USD and have them linked to their Commbiz Service.

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Commbiz Markets

Commbiz Markets is a fast, easy and safe online electronic banking channel for institutional, corporate and business customers.

It is suitable for companies, partnerships, incorporated associations, businesses and non-profit organisations that have an ongoing need for real-time foreign exchange transactions with a minimum foreign exchange turnover of AUD 250,000 per annum, and investments management.

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Hedging policy

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Once the Global Markets Specialist is happy that the client is satisfied with the set-up where they can make and receive foreign currency payments, they can delve further into the client’s hedging policy and their budget rate, and provide the client with some hedging solutions.

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Hedging policy

Most companies with foreign exchange exposures put a hedging policy in place that guides their actions in managing their exposures.

A hedging policy will consider risks such as Interest rate risk, Foreign Exchange risk (transaction and translation), counterparty credit risk and commodity risk. The two key benefits of a hedging policy are:

  1. The identification and qualification of acceptable risk levels for the business
  2. Establishing who within the organisation is authorised to deal with those exposures and risks.

Where companies do not have a hedging policy in place, the Global Markets Specialist can assist the client in formulating one to suit their requirements.

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Early engagement

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It’s very important that the Banker involves the Global Markets Specialist in the transaction as early as possible.

Early engagement will mean the Specialist can recommend to the Banker the internal limits that are required, based on exposure and hedging solutions the client would like to consider.

The Banker needs to submit the limits in an application to Risk and have them approved through the appropriate channels. Depending on the client’s situation, there may also be documentation that needs to be completed and signed prior to the execution of a hedging solution.

As you can see, from the Bank’s point of view, early engagement is important to avoid any delays should the client want to hedge their Foreign Exchange risk in a volatile market.

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