3.2.5.30 Guide for completing Confirmations for Non-A$ FRAs

This part contains commentary on:

  • "Confirmation methods".
  • "Letter confirmation"; and
  • "Settlement Date confirmation".

Also see 3.1.2 "Long form confirmations".

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Confirmation methods.

The following methods can be used to confirm. It is up to the parties to agree which method or methods they will use:

  • Telephone
  • Telex
  • Letter
  • Swift MT340 message
  • Reuters direct dealing system
  • Telerate trading service
  • Facsimile

Following is recommended wording for letters. However this wording and all confirmation procedures must be completed in accordance with market conventions.

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Letter - Care! 

This letter uses terminology contained in an Australian Addendum no longer recommended for use.

Suggested form of letter:

 

 [Letterhead of Party A]

 [Date]

 

[Name and Address of Party B]

 

Dear

 

Forward Rate Agreement

 

The purpose of this letter is to confirm the terms and conditions of a forward rate agreement entered into between us on the Deal Date specified below.

 

Our reference:

Deal Date:

Contract Amount:

Contract Currency:

 

Settlement Date:

Maturity Date:

Settlement Period (days):

Contract Rate:

Borrower:

Lender:

 

Please confirm that this letter correctly sets out the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us.

 Yours sincerely

 [name of party preparing Confirmation]

By:

Name:

Title:

 

Confirmed as of the date first written:

[name of other party]

By:          

Name:

Title:

 

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Settlement Date confirmation

Care!  This letter uses terminology contained in an Australian Addendum no longer recommended for use.

Some parties may choose on the Settlement Date to confirm the Interest Settlement Rate and Settlement Sum either by letter or some other means. If this procedure is to be adopted, the parties should agree which party or parties are to issue such a confirmation on the Settlement Date. A suggested form of letter confirmation follows. It should be appropriately amended if other forms of confirmation are used.

 

 

 [Letterhead of Party A]

 [Date]

 

[Name and Address of Party B]

 

Dear

 

Settlement Date confirmation

 

The purpose of this letter is to confirm the Interest Settlement Rate and Settlement Sum for the following forward rate agreement.

 

FRA Reference Number: Borrower:

Lender:

Deal Date:

Contract Amount:

Contract Currency:

 

Settlement Date:

Maturity Date:

Settlement Period (days):

Contract Rate:

Borrower:

Lender:

Interest Settlement Rate:

Settlement Sum:

 Yours sincerely

 [name of party preparing Confirmation]

By:

Name:

Title:

 


Last Update Date 29 Jun 2011