Currency risk meaning

This Checklist explores how to recognise international contracts for the supply of goods, and why such contracts can involve more considerations than supplying goods domestically. It then outlines a range of points to address when drafting and entering into international supply contracts, covering matters such as credit rating, carriage of goods (or shipping), international trade terms (including Incoterms®), payment, trade finance, currency, exchange controls, import and export restrictions, intellectual property, force majeure, insurance, language, product liability, notices, governing law, jurisdiction, and trade with the EU. The Checklist is written in a practical style from an in-house lawyer’s perspective. Identifying international contracts Does your business know how to identify an international contract, or even what constitutes one? Being able to spot an international contract is important for two reasons: this will determine your role as the in-house lawyer-is this an agreement you can advise on, or do you need to seek external advice? If it is the latter, this may affect the timescales the business is...

In this issue: UK, EU and international regulators and bodies Prudential requirements Financial crime and sanctions Complaints, compensation and claims management Investigations, enforcement and discipline Regulation of benchmarks Regulation of capital markets Dispute resolution for financial services lawyers Sustainable finance and ESG Banks and mutuals Investment funds and asset management EU MiFID II Consumer credit, mortgage and home finance Regulation of insurance Payment services and systems Fintech and cryptoassets Financial Services Enforcement Database Dates for your diary New and updated content Daily and weekly news alerts Intraday news alerts LexTalk®Financial Services: a Lexis®Nexis community UK, EU and international regulators and bodies FCA speech calls for stronger link between finance and national security The Financial Conduct Authority (FCA) has released a speech by its chief executive, Nikhil Rathi, delivered at the Corporation of the City of London’s annual City Dinner on 22...

Conway and others (in their capacity as Joint Special Administrators of Argentex LLP (In Special Administration)) v Plass and others [2025] EWHC 2625 (Ch) What was the background? The matter related to directions requested by the Joint Special Administrators (JAs) of Argentex LLP (Argentex), after the firm entered special administration on 21 July 2025. By an application notice dated 12 August 2025, the JAs invited the court to give directions pursuant to paragraph 63 of Schedule B1 to the Insolvency Act 1986, as applied by the Payment and Electronic Money Institution Insolvency Regulations 2021 (the 2021 Regulations), SI 2021/716, regulation 37. Argentex’s core business comprised payment services alongside currency conversion, and it was authorised by the Financial Conduct Authority (FCA) both as an Electronic Money Institution under the Electronic Money Regulations 2011 and as a MiFID investment firm under Part 4A of the Financial Services and Markets Act 2000. The company offered customers spot, forward and option foreign exchange contracts, but it lacked the capital and authorisation to...

The most common reasons for entering into derivatives are for the purposes of: Speculation — when a party seeks exposure to a given variable, for example taking a view on a commodity’s future price on the assumption it will rise or fall over a chosen period Hedging — aiming to offset exposure to the risk of an unfavourable shift in a variable, or to stabilise expected outcomes over time Arbitrage — seeking to take advantage of price discrepancies (between markets, or within the same market over time) to earn profit or cut costs, or where one participant can reach a price or market unavailable to another, including where prices differ over time Exposure to asset classes — obtaining access to a target market (eg commodities, shares, property) without incurring the expense, complexity and formalities associated with those markets, avoiding the same costs and complications Derivatives are commonly used alongside lending arrangements for hedging purposes in practice. In this context, the primary...

ARCHIVED: This Practice Note has been archived and is no longer updated. It can still assist practitioners seeking to align the provisions of MLD4 with the MLRs. For comprehensive practical guidance on the UK AML/CTF framework relevant to financial services, see the Anti-money laundering and counter-terrorist financing (AML/CTF)—overview; for the EU framework, see the Financial crime and sanctions (EU Law)—overview. Adoption of MLD5 and implementation in the UK The Fifth Money Laundering Directive (EU) 2018/843 (MLD5) was published in the Official Journal of the EU on 19 June 2018 and came into force on 9 July 2018. Member States were required to transpose it into national law by 10 January 2020. MLD5 updates the Fourth Money Laundering Directive (EU) 2015/849 (MLD4). In the UK, MLD4 was implemented by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (the MLRs), which took effect on 26 June 2017. This Practice Note outlines MLD5 and how it was carried into UK law by...

ARCHIVED : This Practice Note has been archived and is not maintained . This Practice Note serves as a launch point to help firms plan and carry out a London Interbank Offered Rate (LIBOR) transition project. It sets out the FCA’s part in the LIBOR switch and how it is supporting firms’ preparations, then examines in greater depth the principal issues raised by UK regulators. This is followed by a checklist highlighting key LIBOR impact areas that firms must review and address, together with points to weigh when doing so. It should be treated as a foundation and read in the context of each firm’s operations and LIBOR exposures, and tailored and adjusted accordingly. Practice Note: LIBOR transition [Archived] offers a broader outline of the matters around LIBOR transition, plus explanations of commonly used terms. The LIBOR developments tracker summarises developments linked to moving from LIBOR to risk-free rates. It covers each LIBOR currency: Sterling US dollars Swiss Francs Japanese Yen Euros...

1.1 The currency conversion rate to be applied in respect of the Charges under this Agreement The rate for converting the Charges under this Agreement shall be the exchange rate of [ [ insert name of foreign-exchange market ] OR [ insert name of bank ], as published on its website, OR the relevant mid-spot rate for the alternative currency quoted by the Financial Times ]. That rate shall apply [ on the date of [ the Agreement ] OR the [ invoice ] OR [ payment ] OR at the close of business on the last calendar month during which the [ Goods ] were delivered ]...

The following questions may arise: has the risk increased such that the insured must disclose it during the policy term? must the information be revealed at renewal? does it trigger any exclusion for pre-existing conditions? has there been non-disclosure or misrepresentation? The insured’s health can be material to many types of cover, including long-term policies (eg life assurance, income protection or critical illness) and short-term policies (eg private medical, accident, or travel insurance). Some policies are fully underwritten at inception via a detailed proposal form. Others require only limited information at the start but exclude pre-existing medical conditions and/or oblige notification of changes to the insured’s health. As a result, it is hard to state universal rules, and the precise terms of cover must be examined carefully in each case. Obligation to disclose during currency of policy In most long-term arrangements, underwriting is completed at the outset and the insurer is able to carry out its own thorough assessment...