Traditionally inter-bank foreign exchange transactions are settled on pre-arranged value dates. In other words if a trader sells 1 million EUR against USD spot on Tuesday, that means he must deliver the value of 1 million Euros on Thursday in order to receive the USD equivalent sum based on the exchange rate agreed upon. (settlement dates in the spot market are valued on a 2 working day basis).
ACM adopts a method of operation by which there are no value dates on any operations and no close out and re-opening of open positions at close of business. We call this process a synthetic spot transaction. This results in a simple one line transaction on the customer's transaction statement instead of an extremely complicated multi-entry statement which is generally unintelligible for anyone not very well acquainted with interbank transactional dynamics.
ACM applies a cost of carry on behalf of the market or the customer on open positions held overnight. This overnight cost of carry is presented as a simple flat fee either paid or charged on a customer's account. This process makes for extremely simple statements and greatly increased executional transparency since we do not modify the original price of the position entered into by the customer.
Overnight costs are credited & debited on any positions held after 23:00 CET. As the markets are closed on Saturdays and Sundays there is no rollover on these days but the banks still calculate interest on any position held over the weekend. To account for this the procedure in the forex market is to apply 3 days of rollover on Wednesdays. The exception being USD CAD where three days of rollover will be applied on a Thursday to take account of the weekend.
Those fees for credit and debit can be found in the indicative table, which is updated daily according to market conditions.
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