Participants in the foreign exchange market have the right to carry out transactions called conversion operations. What does such a concept mean? What types of such transactions exist? In what order are they carried out on client accounts? Let's take a look at the legal nuances.

such currency operations that are performed by the bank in the interests and with the consent of the client and consist in the exchange (conversion) of the currency. Simply put, it is a transaction for the sale or purchase of one currency in exchange for another. They imply the mandatory coordination of the volume of funds to be sold, the date of the transaction and the exchange rate. The actual execution of the transaction can be carried out immediately or after a specified period of time.

As the name implies, the main objects (subject) of conversion transactions are the currency of various countries or territories, and the main participants are the Central Bank, stock exchanges, brokers, the state, the client and the executing bank. In order to exchange funds on client accounts, money is accumulated. The transaction can be executed in any of the current currencies at a predetermined rate and on a specified date.

Conversion operations on customer accounts - types according to 181-I

At the level of banking legislation, the types of such operations are regulated by the Bank of the Russian Federation in Instruction No. 181-I dated 08/16/17. The latest version was adopted on 11/29/17. In accordance with Appendix 1 of this regulatory document, the following types of conversion non-cash transactions are distinguished:

• 010 - sale of foreign currency by a resident for Russian currency.
• 030 - purchase of foreign currency by a resident for Russian currency.
• 040 - sale or purchase by a resident of one foreign currency for another.
• 010 - purchase of Russian currency by a non-resident for foreign currency.
• 020 - sale of Russian currency by a non-resident for foreign currency.

Additionally, conversion transactions are grouped according to their urgency:

• Current type spot - usually the execution occurs instantly. In this case, the current exchange rate is used, which is relevant at a given moment.
• Term forward - settlement occurs on a deferred date. The rate is forward.

Note! As a rule, conversion transactions are executed instantly, that is, with the delivery of the currency no later than the 2nd business day of the executing bank. Such transactions are called spot. But in some cases, the transaction can be executed in advance, and the value date is postponed for an indefinite moment. These are all forward transactions.

Carrying out conversion operations on customer accounts

Often, conversion transactions are carried out not for the sake of receiving income from exchange rate fluctuations, but in order to fulfill the terms of a foreign trade agreement. At the same time, the company may have an open ruble account in the bank, or vice versa, a foreign currency account. And in order to transfer the required type of funds under the contract, the conversion of funds is carried out with subsequent payment.

The exact procedure for conducting the exchange may vary depending on the rules adopted by the executing bank. There is no clear regulation for conversion transactions in the current legislation. To be able to execute conversion transactions, the client must write an application. The commission is charged according to the tariffs of the cash settlement of a banking institution. It is also better to specify all the main exchange conditions - the value date, the exchange rate, the collateral for a forward-type transaction and others in advance so as not to get an unpleasant surprise later.

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Normative-legal regulation of conversion operations. Conversion operations at your own expense (within the established limit), with a value date on the day of the conclusion of the transaction (transactions "today"), with the date of execution of transactions "not later than the second business day from the date of its conclusion" (transactions "tomorrow" and "spot" ). Conversion operations at the expense of the client. The bank's income from such operations. Income and expenses arising from the implementation of foreign exchange transactions. Revaluation of foreign currency accounts.

Outline the procedure for filling out an application, certificate and receipt for conversion operations.

Attachments: certificates, applications, receipts.

Topic 26

Organization of accounting of incomes and funds of budgets of all levels. The structure of the budget system. Documents used for accounting and distribution of income. Information submitted to federal treasury bodies for the distribution of income between the budgets of different levels of the budget system of the Russian Federation. Accounting for income and expenses distributed by the bodies of the Federal Treasury (OFK). Classification of incomes and expenses of the budget of various levels.

Outline the procedure for filling out a payment order, a payment request, a collection order and a letter of credit.

Applications: schemes, graphs, diagrams, payment order, payment request, collection order and letter of credit.

Topic 27. Measures aimed at preventing the use of transnational operations for criminal purposes.

Organization of work to counter the legalization (laundering) of proceeds from crime and the financing of terrorism. Programs for the implementation of internal control. Procedure for exercising internal control. Grounds and procedure for suspending transactions with cash or other property. The procedure for the submission by organizations of information on transactions with cash or other property subject to control. The procedure for ensuring the confidentiality of information.

Outline the procedure for filling out the job description of a special official responsible for compliance with the Internal Control Rules.

Annexes: job descriptions of a special official responsible for compliance with the Internal Control Rules.

Topic 28. Systems of international financial telecommunications, their disadvantages and advantages.

Systems of interbank telecommunications. Email systems. Specialized telecommunications networks. Worldwide interbank system SWIFT. The main goals of creating SWIFT and the main stages of its development. Advantages and disadvantages of the network. Electronic systems of interbank settlements. Electronic payments in the banking system of Russia. Advantages and disadvantages of the network. Ensuring the security of SWIFT operation.

Outline the procedure for filling out a payment order, collection order.

Applications: diagrams, graphs, system usage dynamics in Russia and abroad, payment order, collection order.

Conversion transactions are operations for the purchase and sale (exchange, conversion) of the agreed amounts of the currency of one country for the currency of another country or an international monetary unit at an agreed rate on a certain date.
Conversion operations are usually called "forex" (forex or FX - short for Foreign Exchange Operations). The world currency market is dominated by interbank conversion operations.
Conversion operations of a commercial bank are divided into client and arbitrage. The former are carried out by the bank on behalf of and at the expense of customers (enterprises, the population), the latter (currency arbitrage) are carried out by the bank at its own expense in order to make a profit due to the difference in exchange rates. Currency arbitrage can be defined as the purchase (sale) of a currency, followed by a counter-transaction (reverse transaction) in order to receive exchange rate profit.
There are spatial and temporal currency arbitrage. The first is used to make a profit due to the difference in rates in different currency markets. An arbitrageur buys (sells) a currency, for example, in Singapore and almost simultaneously sells (buys) this currency through his correspondent, i.e., makes a counter-transaction (reverse transaction) in London. Spatial arbitrage is not associated with currency risk (the risk of loss from a change in the exchange rate), since the purchase and sale of currencies are made simultaneously. With modern means of communication and telecommunications, spatial arbitrage in world markets has lost its former importance, since the simultaneous activity of dozens of dealers from many banks in different countries leads to the alignment of the interbank exchange rate.
With temporary arbitrage, the exchange rate profit is formed due to changes in the exchange rate over a certain period of time, so such arbitrage is associated with currency risk.
A variation of currency arbitrage is interest arbitrage, in which profits arise due to the difference in interest rates and exchange rates. If, for example, the interest rate on euro deposits has risen compared to the pound sterling rate, the English speculator will exchange

Page--- 241 --pounds for euros, invests euros in a deposit at a higher interest rate and at the expiration of the deposit will exchange euros for pounds. Such arbitrage is called "uncovered", it is associated with the currency risk of depreciation of the euro against the pound. To insure currency risk, “covered” arbitrage is carried out - simultaneously with investing euros in a deposit, the investor sells euros for the term of the deposit (an amount equal to the deposit in euros, plus interest on the deposit) at a fixed rate for pounds.
The essential conditions of any operation (transaction) include the date of its conclusion and the date of execution (value date).
The date of the conclusion of the transaction (date of the transaction) is the date when the parties to the transaction reach an agreement on all its essential terms. The value date for conversion transactions is the date agreed by the parties for the delivery of funds to the account of the counterparty in the transaction. Value dates are business days only. If a bank makes a transaction and/or settles on a transaction on a day off or holiday established by federal law, as well as on a day off transferred to a working day by a decision of the Government of the Russian Federation, the transaction and/or settlements on the transaction are carried out according to the accounting accounts on the first working day. the day following that non-working day. »
Depending on the value date, conversion operations are divided into two groups: cash (cash), or current, and urgent.
The Bank of Russia defines a cash (cash) transaction as a transaction, the execution of which is carried out no later than the second business day after its conclusion. Such transactions include transactions with settlements (value date) “today” (today, or transactions “on the tode”); settlements "tomorrow" (tomorrow, or deals "on the volume") and spot deals, or "on the spot".
The value date of transactions "on the tod" coincides with the day of the conclusion of the transaction, and transactions "on the volume" occurs on the business day following the day of the conclusion of the transaction. Spot transactions are executed on the second business day after their conclusion (for example, if a spot transaction is concluded on Monday, then the day of its execution will be Wednesday, and if the transaction was concluded on Thursday, then the value date will be Monday; Saturday and Sunday are non-working days).

A spot deal is the most common current deal in world practice. Translated from English, spot means "cash available." Therefore, the terms "cash", "cash" are used to refer to current foreign exchange transactions, although most of them (as well as all foreign exchange transactions in general) are carried out in a non-cash way. The market for current conversion operations is called the spot market.
Current conversion operations also include bank operations for the purchase and sale of foreign currency in cash to individuals (both residents and non-residents).
A futures transaction is defined by the Bank of Russia as a transaction, the execution of which is carried out by the parties no earlier than the third business day after its conclusion. Futures transactions have two features. Firstly, the time interval between the moment of conclusion and the moment of execution of the transaction is longer than for the current transaction. A futures transaction is based on a contract for the sale of foreign currency with delivery at a certain date or for a certain period in the future. Hence - the second feature - the exchange rate, fixed at the time of the transaction, may deviate significantly from the exchange rate in the foreign exchange market at the time of its execution (the current rate). When the stipulated time comes, the currency is bought or sold at the rate fixed in the contract of sale.
Forward deals include forwards, options and futures.
Forward operations (forward operations, or fwd) are the type of forward transaction most widely used by banks. They are used to insure currency risks or for the purpose of currency speculation. The exporter can insure against a decrease in the foreign exchange rate by selling the bank future foreign exchange earnings for a period at the forward rate. An importer can insure against an increase in the exchange rate by buying foreign currency at a bank for a period.
Currency speculators who play for a fall in the exchange rate (“bears”) sell the currency for a period, hoping that by the time the transaction is executed, the exchange rate on the market will be lower than the forward rate. If the expectations of the "bears" come true, they will buy the currency at a lower current rate and sell it at a higher forward rate, making a profit in the form of exchange rates.
owl difference. Speculators who play for an increase in the exchange rate (“bulls”), expecting an increase in the exchange rate, buy it for a period at the forward rate in order to receive currency from the seller at the time of the transaction at the rate fixed at the time of the transaction (forward rate), and sell it on the market at a higher current rate, receiving a market profit.
Usually forward transactions are concluded for a period of 1 week to 12 months, and for standard periods of 1, 2, 3, 6, 9, 12 months. (straight dates of value - strait dates). The value date is determined "from the spot". If, for example, a three-month forward contract was entered into on January 27, 2003, the value date would be April 29, 2003 (January 27, 2003 + 3 months). When the spot date falls on the last day of the month, the end of month rule applies. So, if a forward transaction for 1 month was concluded on February 26, 2003 with a spot date of February 28, then the value date will fall on the last day of March, i.e. on March 31, and not on March 28.
If the term of the forward contract is from one day to one month, the contract is considered concluded for short dates (short dates). If the value dates do not coincide with the standard terms, the terms of transactions are called broken dates (broken dates).
Most often, forward transactions are completed by the delivery of foreign currency. But a forward contract can also be executed without the delivery of currency - by conducting a counter-transaction (opposite transaction) on the date of execution of the forward contract at the current exchange rate. A forward contract without delivery of the underlying asset is called a settlement forward.
For example, a bank entered into a one-month forward transaction in January 2003 to sell $1,000 at a rate of RUB 31.90. per dollar. In February, he must bet $1,000 in exchange for 31,900 rubles. In the case of a settlement forward, instead of delivering dollars, the bank will make a counter transaction, i.e., it will buy $1,000 for rubles at the current exchange rate. If in February 2003 the current exchange rate was 31.70 rubles, the bank bought $1,000 for 31,700 rubles, so the result of the settlement forward was the payment to the bank in February by its counterparty of 200 rubles. (31900 -31700).

Page--- 244 --The rate for a forward transaction is usually different from the rate for a spot transaction. The forward rate is set by the premium or discount method.
The premium means that the forward rate is higher and the discount is lower than the spot rate. The difference between spot and forward rates is called forward difference, forward points or swap difference, swap points (swap points, swap rate). This is because the difference in the rates of the two transactions of a standard swap transaction is determined in forward points.
The difference between the spot rate and the forward rate primarily reflects the difference in interest rates for the relevant period on the exchanged currencies. Forward premiums and discounts help offset interest rate differentials. The currency with the lower interest rate is quoted in the forward market at a premium to the currency with the higher rate. The currency with the higher interest rate is quoted at a discount. Consequently, in the foreign exchange market, the advantage of a higher interest rate on a particular currency tends to be offset by a depreciation of that currency in the forward market compared to the spot rate.
The situation when the forward premium (discount) as a percentage of the spot rate corresponds to the difference in interest rates is called interest rate parity. The approximate swap difference in terms of interest rate parity is determined by the formula

conversion transaction currency

Conversion operations - transactions of purchase and sale of cash and non-cash foreign currency against cash and non-cash rubles of the Russian Federation.

Federal Law No. 173-FZ dated December 10, 2003 “On Currency Regulation and Currency Control” international economic cooperation.

All operations for the purchase and sale of foreign currency are carried out through authorized banks.

The participants of the foreign exchange market are the Central Bank, authorized banks, investment companies and funds, brokerage organizations, branches and representative offices of foreign banks.

Domestic foreign exchange market: currency trading is carried out on the exchange and over-the-counter markets.

The exchange market is represented by exchanges that have the appropriate license.

Exchanges operate on the basis of the charter and the main tasks of their activities are the mobilization of temporarily free funds in rubles and foreign currency, and the establishment of exchange rates.

The trading rules are established by the exchange committee, and the trading technique - by the Central Bank.

The Central Bank determines the types of currencies for which trades are made, the maximum amount of deviations from the previous exchange rate, the requirements for the timing and procedure for making payments under concluded contracts, and the amount of commission.

The exchange currency market can serve as the MICEX, which was established in 1992 as a closed joint-stock company.

Bidders conduct transactions through their representatives - dealers, who act on the basis of a power of attorney. Trading and determining the current investment rate are determined by a specially authorized employee of the exchange - a rate broker.

Before the start of trading, applications for the purchase or sale of investments are submitted. If the total amount of investment supply at the beginning of trading exceeds the amount of demand for it, then the exchange broker lowers the rate and vice versa.

The Central Bank can make foreign exchange and ruble interventions on the stock exchanges in order to maintain a stable exchange rate of the national currency.

The over-the-counter foreign exchange market is represented by commercial banks that enter into agreements for the purchase and sale of foreign currency. These transactions are formalized by contracts, which specify:

• - participants in the transaction;
• - transaction currency;
• - date and time of the conclusion of the transaction;
• - date of execution of the transaction.

The execution of such currency relations is regulated by the state, which seeks to implement its monetary policy aimed at ensuring sustainable development and maintaining the equilibrium of the balance of payments.

Cash transaction - a transaction in which the purchase or sale of currency is carried out no later than two business days from the date of the transaction at the rate fixed at the time of the transaction.

Cash transactions are divided into 3 types:

• 1. TODAY trades with value date today
• 2. Trades "TOMORROW" with value date tomorrow
• 3. SPOT transactions with a value date on the second day from the date of conclusion of the transaction.

A transaction of the "TODAY" type is a conversion transaction with a value date on the day the transaction is concluded.

A TOMORROW type transaction is a conversion transaction with a value date on the banking business day following the day of the transaction.

The difference in exchange rates on the date "today" and the date "tomorrow" determines the possibility of obtaining additional income.

Under a transaction of the "SPOT" type - a conversion transaction with a value date on the second working banking day after the day the transaction was concluded.

Cash foreign exchange transactions are carried out mainly on the "SPOT" terms, which implies a two-day period for the transfer of currencies after the conclusion of the transaction at the rate fixed at the time of its conclusion. This allows you to transfer funds to any country and complete the transaction. Correspondent relations between banks serve as the basis for conducting SPOT.

Their essence lies in the purchase and sale of currency on the terms of its delivery by counterparty banks on the second business day from the date of the transaction at the rate fixed at the time of its conclusion. In this case, business days are counted for each of the currencies involved in the transaction, i.e. if the next day after the date of the transaction is non-working for one currency, the delivery time for currencies is increased by 1 day, but if the next day is non-working for another currency, then the delivery time is increased by another 1 day.

Banks use SPOT transactions to maintain the minimum required working balances in foreign banks in nostro accounts in order to reduce surpluses in one currency and meet the need in another currency. With this, banks regulate their foreign exchange position in order to avoid the formation of uncovered account balances. Despite the short term for the delivery of foreign currency, the counterparties bear the currency risk under this transaction, as in the conditions of "floating" exchange rates, the exchange rate can change even in two business days.

Forward transactions - transactions of purchase and sale of foreign currency, executed by contracts for a period with an indication of a specific settlement date that is more than two business days away from the date of conclusion of the transaction.

• 1. a long period of time between the moment of conclusion of the transaction and its execution. Formally, this period should exceed 2 business days, but in fact it is at least 30 business days. Quite typical are terms of 30, 60,90,180 days;
• 2. at the time of the conclusion of the contract, the presence of an asset (currency) from the parties is not necessary. Moreover, there are varieties of futures transactions, where the parties stipulate in advance the execution of the transaction without buying and selling currency. The main purpose of futures currency transactions is as follows:
  • - receipt of the required currency by the time of execution of the main foreign economic contract (trade, financial);
  • - currency speculation and arbitrage;
  • - protection against currency risks, called hedging.

This is especially important for term transactions, since with its increase the potential risk of changes in the exchange rate increases.

The main types of futures transactions with currency are:

• forward transactions
• · futures transactions;
• option transactions.

Forward transaction - a transaction, the value date of which is more than 2 banking days away from the date of conclusion of the transaction at the exchange rate determined at the time of the transaction.

Forward transactions are divided into 2 types:

1. Outright transactions (outright) - an exchange forward currency transaction, including a premium or discount, in which the exchange rate is set in advance, and the execution of the transaction itself is permissible after a deferred period of time, not less than 2 business days after its conclusion.

In an outright operation, both parties are bound by the contract. Such transactions are carried out in the over-the-counter market. The contracting parties are usually either two commercial banks or a commercial bank and a client.

2. Forward SWAPs - a combination of two outright transactions.

There are two options for the execution of a forward currency contract:

• - by real delivery of the sold currency (delivery forward);
• - by paying the losing party the difference between the forward rate and the current rate at the time of contract execution (settlement forward).

With a delivery forward, the seller of the currency must actually sell it, regardless of how he himself acquires this currency. If the seller does not have the currency at the time of execution of the forward contract, he will be forced to buy it on the spot market at the prevailing current rate. With a settlement forward, there is no real delivery of currency, but only the payment of the specified difference in currency is carried out either in favor of the seller or in favor of the buyer.

Futures transaction - a futures transaction for the purchase and sale of goods, currencies, securities at prices in force at the time of the transaction, with the delivery of the purchased goods and their payment in the future.

In futures trading, the interaction between the representatives of the buyer and the seller is carried out through the exchange; when concluding a contract, they must accept the price set as a result of the trading session (if this price corresponds to the application of the seller or buyer).

The futures contract itself represents the broker's obligation to the Clearing House to sell or buy currency in the future. Recalculation of the positions of the parties under the futures contract is carried out daily.

Before the beginning of the contract execution period, each party can close its position by making a reverse (offset) transaction at the price that is currently prevailing for the corresponding type of contracts. In this case, the Exchange Clearing House returns the initial insurance fee to the participant.

It is better to ensure the supply of currency in the required amount and at the required time through forward contracts with commercial banks. However, it is necessary to take into account the low liquidity of forward contracts.

Arbitrage transactions - transactions between the Bank and the Client for the purchase or sale of non-cash foreign currency of one type for foreign currency of another type (hereinafter referred to as transactions) with the calculation of the agreed value date. These operations involve the implementation of at least two opposite transactions for the purchase and sale of currencies for the same amount

Another country at an agreed rate with settlements on a specific date.

In a legal sense, conversion operations are transactions for the purchase and sale of currencies. Concerning conversion operations in English the stable term Foreign Exchange Operations (briefly Forex or FX) is accepted.

The main difference between conversion operations and credit and deposit operations is that the former do not have a duration in time, that is, they are carried out at a certain point in time, while deposit operations have a duration in time and different urgency.

By deadline conversion operations are divided into two groups:

1. Operations of the spot type, or current conversion operations;

2. Forward or urgent conversion operations.

In world practice, it is accepted that current conversion operations on the main world currency pairs are carried out on a spot basis, that is, with a value date on the 2nd business day after the day the transaction was concluded. The international market for current conversion operations is called the spot market. The terms of spot settlements are quite convenient for the counterparties of the transaction: during the current and the next day after its conclusion, it is convenient to process the necessary documentation, issue payment orders for making transfers. In Russia, as well as in a number of developing countries, a different practice has developed for settlements on conversion transactions. Current (or the term is used - cash) transactions on the dollar / ruble market are concluded with a value date of "today" (today), "tomorrow" (tomorrow) and only occasionally on the spot. Transactions with a value date today can be concluded throughout the entire business day, since cashless transfers in dollars can be made until late (in the United States, due to an eight-hour time difference, the cut-off time falls on the late evening in Moscow) and in rubles (due to the fact that Settlement cash centers (RCCs) of the Central Bank of the Russian Federation accept payment orders until 21:00 Moscow time).

Forward (urgent) conversion operations(FX forward operations or FWD for short) are currency exchange transactions at a pre-agreed rate that are concluded today, but the value date (that is, the execution of the contract) has been postponed for a certain period in the future.

Forward operations are divided into two types:

1. Outright deals- a single conversion operation with a value date different from the spot date. They account for about 17% of futures transactions;

2. Currency swap transactions(FX swap) - they make up 83%, that is, most of the forward operations.

Literature

• D. Yu. Piskulov. Theory and practice of currency dealing. Educational edition.

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