With Guarantee

Forward

• The product

  The Non-deliverable forward allows trading of foreign exchange rates or future parities. It is used as a foreign currency hedge where the party has the obligation to either make or take a foreign currency payment at some point in the future. 

  Settlement occurs on the expiration date based on the difference between the register forward market rate and the market rate set as reference applied to notional operation amount.

  B3 allows for the registration of currency Non-deliverable forward  with and without CCP.

• The asset

  With CCP

  Base-currency	Quoted currency	Description	Quotation Type
  United States Dollar	Yen	USDJPY	Parity
  United States Dollar	Real	USDBRL	Foreign Exchange Rate
  Euro	Real	EURBRL	Foreign Exchange Rate
  Yen	Real	JPYBRL	Foreign Exchange Rate

  Without CCP

  Base currency	Quoted currency	Description	Quotation type
  Argentine peso	Brazilian real	ARSBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Argentine peso	USDARS	Parity
  Australian dollar	Brazilian real	AUDBRL	Taxa de câmbio
  			USD cross foreign exchange
  Australian dollar	United States Dollar	AUDUSD	Parity
  Pound sterling	Brazilian real	GBPBRL	Taxa de câmbio
  			USD cross foreign exchange
  Pound sterling	United States Dollar	GBPUSD	Parity
  Canadian dollar	Brazilian real	CADBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Canadian dollar	USDCAD	Parity
  Chilean peso	Brazilian real	CLPBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Chilean peso	USDCLP	Parity
  Colombian Peso	Brazilian real	COPBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Colombian Peso	USDCOP	Parity
  Danish krone	Brazilian real	DKKBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Danish krone	USDDKK	Parity
  Euro	Brazilian real	EURBRL	Foreign Exchange rate
  			USD cross foreign exchange
  Euro	United States Dollar	EURUSD	Parity
  Hong Kong dollar	Brazilian real	HKDBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Hong Kong dollar	USDHKD	Parity
  Malaysian Ringgit	Brazilian real	MYRBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Malaysian Ringgit	USDMYR	Parity
  Mexican peso	Brazilian real	MXNBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Mexican peso	USDMXN	Parity
  Danish krone	Brazilian real	TRYBRL	Taxa de câmbio
  			USD cross foreign exchange
  United States Dollar	Danish krone	USDTRY	Parity
  New Zealand dollar	Brazilian real	NZDBRL	Taxa de câmbio
  			USD cross foreign exchange
  New Zealand dollar	United States Dollar	NZDUSD	Parity
  Russian ruble	Brazilian real	RUBBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Russian ruble	USDRUB	Parity
  Singapore dollar	Brazilian real	SGDBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Singapore dollar	USDSGD	Parity
  South African rand	Brazilian real	ZARBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	South African rand	USDZAR	Parity
  Swedish krona	Brazilian real	SEKBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Swedish krona	USDSEK	Parity
  Swiss franc	Brazilian real	CHFBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	Swiss franc	USDCHF	Parity
  United States Dollar	Brazilian real	USDBRL	Foreign Exchange rate
  South Korean won	Brazilian real	KRWBRL	Foreign Exchange rate
  			USD cross foreign exchange
  United States Dollar	South Korean won	USDKRW	Parity

• Specifications

  Contract size	Freely established by the parties, based on the base currency of the operation.
  Fixing date	With CCP: day prior to the settlement date, when the parity or foreign exchange rate used as reference for the settlement process is considered. Without CCP: settlement parity or foreign exchange rate consideration date established in the contract, which may extend to the fifth business day prior to the due date.
  Expiration and settlement day	Date of calculation regarding the settlement value and establishment of the respective financial flow, freely established by the parties.
  Settlement procedure	With CCP: settlement is cleared through Clearinghouse. Without CCP: settlement done directly by the parties.
  Warranty provision	Early deposit of assets – as per regulation – is only required for operations with B3 acting as CCP.
  Expiration period	Freely established between the parties.
  Settlement price	Quote considered on the fixing date, used as reference for settlement calculation purposes.

• Benefits
  • Hedge against unwanted currency fluctuations;
  • Non-deliverable forward without CCP do not require early or intermediate adjustments, which occurs when hedging with options(which requires initial premium payments), or when trading futures market instruments (which require margin and  daily settlements adjustments), providing an effective protection for clients that lack of cash flow  management to handle intermediate disbursements; and
  • Non-deliverable forward with CCP mitigates credit risks to the parties, since B3 guarantees the operations.