In earlier article “Forex Trading Platform – FX-Retail” we discussed  about basic features of the FX-Retail platform.

This article further dives into the terms and conditions applicable while dealing on FX-Retail.

Definitions

Relationship Bank: FX-CLEAR member with whom the Customer holds an account relationship and is entitled to approve the registration of the Customer for providing access to the FX-Retail platform.

Home Branch: Home branch is the branch where the Customer maintains the account with the Relationship Bank.

Trading Branch: Trading branch is the branch registered by the Relationship Bank in the FX-Retail platform

Relationship Bank’s Role

1. Approval of Customer
2. User Creation
3. Trading Branch Registration
4. Customer Limit Management
5. Customer Mark up Setting
6. SWAT Quote

Markup

1. Banks can set Mark up which would be adjusted with Trade Rates. Markup is the margin which banks add on ongoing spot rate.
2. Every Deal Ticket will  have mark up details charged by Relationship Bank.

SWAP Quote

• Swap quotes for deriving the price for Cash and Tom would be as defined by the Relationship Bank.
• In case the swap quotes are modified by the Relationship Bank, it may result in modification /revision of the corresponding spot prices of our outstanding Cash and Tom orders.

Inter Bank Spot Market

Customer shall have access only the Retail Market for trading and the Inter-bank Spot market watch on the FX-Retail Platform is available  only for view purpose.

Trading Limit Set by Bank

• Relationship Bank shall set the limits for trading on the platform for a particular time period and orders will be validated against these limits. Orders would get placed based on successful validation against the available limits for the instruments at that point in time
• In case of limit inadequacy in a particular instrument or all instruments, the respective instrument/s shall be unavailable for trading on the FX-Retail platform and any order placed by customer in such instrument/s shall be rejected by the system

Who can place quote on FX-Retail

• Customer can directly place quote on FX Retail.
• Relationship Bank has the facility to place, modify and cancel orders on behalf customer based on request.
• Deal ticket: The customer would get a deal ticket with the Relationship Bank as the counterparty for every order placed.

Order Matching and Trading Parameters

1. Clearcorp will specify various Trading parameters which may include the types of Orders that can be placed on the FX-Retail Platform, lot size, Price Bands, Order Matching Rules and such other parameters.
2. Orders can be placed on the FX-Retail platform as per the lot size
   and minimum lot
3. Order Match Rules
   • Orders shall be matched on the basis of Price-time priority;
   • The time recorded at FX-Retail Platform shall be the basis for determining time priority;
   • If the Order matches, then the Trade shall take place for the lower of the Order quantity placed between the Members;
   • The Best Bid Order shall match with the Best Offer Order. For dealing on Price, the best Bid Order shall be the one with the highest Price and the best Offer Order shall be the one with the lowest Price;
4. Orders placed on the FX-Retail Platform may not be traded or may be traded partially or fully, based on the order quantity of the matching orders available at that point in time .

Modification and Cancellation of Orders

• Orders shall be modified by effecting changes in the input parameters in the manner and subject to such conditions, as may be prescribed by Clearcorp from time to time
• Modified Order may lose its time priority
• In the event of any technical issue or failure of connectivity, Clearcorp or  Relationship Bank may on behalf of customer cancel all  outstanding Orders

Rejection of Orders/Trades

1. When the Orders/Trades are not adequately covered by adequate limits as set by customer’s Relationship Bank
2. When Orders are not as per the terms and conditions as applicable to such Orders
3. In the event of declaration of unscheduled holiday or sudden development including failure of systems and applications whereby dealing operations for a particular Settlement Date have been temporarily suspended
4. Trades at Off Market Prices
5. In the event of Force Majeure
6. Such other instances as may be specified by Clearcorp from time to time

Outstanding Order at End of Day

Any order outstanding at the time of the session close would be automatically cancelled by the system

Risk Management & Settlement

Each matched trade of the customer may result in two transactions i.e. one between the customer and its bank and another between the customer’s bank and the counter-party bank except in cases where the customer orders are executed between the customer and customer’s bank. The settlement of the inter-bank deal (between the customer’s bank and the counter-party bank) will be the responsibility of these banks and will be settled as per the current CCIL settlement process. However, the customer deal will be settled bilaterally between the bank and its customer

Disputes

Customer will have to approach Relationship Bank for resolution of any disputes arising from dealing on FX- Retail Platform

Reference

1. CCIL: Writeup on FX-RETAIL Platform
2. CCIL: Terms and Conditions for Customer

Related Article

1. Forex Trading Platform “FX-Retail” for CCIL and RBI
2. FX-Retail Platform: FAQ
3. Basics of Exchange Rate
4. Legal Entity Identifier (LEI) Number