AGREEMENT FOR PAYMENT OF INTEREST ON MARGIN PAID TO CSL
Parties
(1) Currency Solutions Limited, being a company incorporated and registered in England and Wales with company number 04864491 whose registered office is at Unit 35, Fourth Floor Hobbs Court, 2 Jacob Street, London, England, SE1 2BG (“CSL”);
(2) Client specified in the Proposal Term Sheet (“Client”)
BACKGROUND
(A) The Client has agreed to the CSL Payment Terms (as such term is defined in clause 1) and/or the CSL Derivative Terms (as such term is defined in clause 1) with CSL.
(B) The Client can enter into:
(a) Unregulated FX Contracts (as such term is defined in clause 1) with CSL, under the CSL Payment Terms; and/or
(b) Derivative Contracts (as such term is defined in clause 1) with CSL, under the CSL Derivative Terms.
(C) In accordance with CSL Payment Terms, CSL reserves the right to request a part payment of monies owing to CSL under the Unregulated FX Contract at the time the Unregulated FX Contract is entered into and at any time before the Unregulated FX Contract completes (which is referred to as Unregulated Margin in this agreement);
(D) In accordance with the CSL Derivative Terms, CSL reserves the right to request a part payment of monies owing to CSL under the Derivative Contract at the time the Derivative Contract is entered into and at any time before the Derivative Contract completes (which is referred to as Derivative Margin in this agreement);
(E) CSL and the Client have agreed that CSL shall pay Interest (as such term is defined in clause 1) to the Client in accordance with the terms of this agreement.
AGREED TERMS
1. Interpretation
1.1 The following definitions and rules of interpretation apply in this agreement.
Business Days: a day other than a Saturday, Sunday or public holiday in England, when banks in London are open for non automated business.
CSL Derivative Terms: CSL’s framework terms and conditions, which allows its clients to enter into Derivative Contracts with CSL.
CSL Payment Terms: CSL’s framework terms and conditions, which allows its clients to enter into Unregulated FX Contracts with CSL and execute payments.
Derivative: a contract whose payoff depends on the foreign exchange rate of two currencies, other than an Unregulated FX Contract. Some of the more common Derivatives include forward foreign exchange contracts (other than an Unregulated FX Forward Contract), options and swaps.
Derivative Contract: a contract entered into under the CSL Derivative Terms whereby the client agrees to purchase a Derivative from CSL.
Derivative Margin: margin that the client pays to CSL under a Derivative Contract.
Interest: interest at the Interest Rate on Margin.
Interest Rate: has the meaning set out in clause 3.
Live Contracts: Unregulated FX Contracts and Derivative Contracts which CSL has entered into with the Client which have not, at the date of calculation of Interest, completed, expired or been terminated.
Offside Amount: the amount of losses that CSL calculates, acting reasonably, that it would incur if the Live Contracts were terminated on the day of calculation.
Margin: both Derivative Margin and Unregulated Margin which CSL has received from the Client and relates to Live Contracts less the Offside Amount.
Relevant Currency Base Rate: means, for Margin provided in:
(a) GBP, the base rate of the Bank of England as this changes from time to time, which can be found on the following weblinkhttps://www.bankofengland.co.uk/;
(b) EUR, the European Central Bank’s deposit facility rate, which can be found on the following weblink https://www.ecb.europa.eu/stats/policy_and_exchange_rates/key_ecb_interest_rates/html/index.en.html;
(c) USD, the Effective Federal Funds Rate, which can be found on the following weblink (https://www.newyorkfed.org/markets/reference-rates/effr#:~:text=The%20New%20York%20Fed%20publishes,at%20approximately%209%3A00%20a.m.)
Spot Contract: a foreign exchange contract where money in the purchased currency will be made available to the client within 2 business days of the client entering into the foreign exchange contract.
Unregulated FX Contracts: a Spot Contract and an Unregulated Forward FX Contract.
Unregulated Forward FX Contract: a foreign exchange contract where money in the purchased currency will be made available to the client more than 2 Business Days after the day the client enters into the foreign exchange contract and which is entered into to facilitate a means of payment for identifiable goods and/or services or direct investment.
Unregulated Margin: margin that the client pays to CSL under an Unregulated FX Contract.
1.2 Writing. A reference to writing or written includes email.
2. Contractual Period
This agreement shall commence on the date set out at the start of this agreement and shall continue until terminated in accordance with clause 9 (termination).
3. Interest Rate
The interest rate applicable is outlined in the Proposal Term Sheet. Additionally, the margin held is to be paid at the relevant currency base rate for the entire duration of the contract.
4. Payment of Interest
4.1 CSL shall pay the client Interest in accordance with this clause 4.
4.2 Interest shall:
(a) be calculated in the currency that CSL has received Margin from the Client in; and
(b) shall be calculated on a daily basis.
4.3 Within 10 Business Days of the end of each calendar month, CSL shall send the Client a statement (the “Interest Statement”) setting out the amount of Interest that accrued to the Client in that month together with an explanation of how that Interest was calculated.
4.4 The Client and CSL shall agree in writing whether Interest shall be:
(a) paid out to the Client, in which case:
(i) it will be sent on a day which is no later than 20 Business Days after the last day of the calendar month, to which the Interest payments relate to the account specified in clause 5 or otherwise notified by the Client to CSL in writing; and
(ii) the interest will not be compounded.
(b) retained by CSL, in which case CSL will treat the Interest which has been accrued during a particular month as having been added to the Margin at the end of the month in which the Interest accrued.
4.5 If the Client wishes to change how it is paid out in accordance with clause 4.4, then it must inform CSL in writing prior to the end of the relevant calendar month.
4.6 The Client understands that all Interest payable under this agreement is exempt from VAT (or any other similar sales tax). In the event, however, that the Interest paid is deemed not to be exempt from VAT (or any other similar sales tax), the Interest paid or payable to the Client shall be deemed to be inclusive of VAT (or any other similar sales tax) and the Client shall remain solely liable for its payment to HMRC.
4.7 If the Client would like to receive Interest in a currency other than the currency that CSL holds the related Margin in, then CSL shall convert the Interest which has accrued at CSL’s standard rate of exchange on the day of payment.
4.8 CSL shall be entitled to withhold all or any Interest otherwise payable to the Client, in the event that the Client owes CSL money.
4.9 CSL shall keep separate accounts and records giving correct and adequate details of all Unregulated Margin and Derivative Margin received from the Client and details of how Interest was calculated.
5. Method of paying Interest
If Interest is to be paid out, in GBP, to the Client, it shall be paid to the following account:
| Bank name | Bank branch | ||
| Account name | Bank postcode | ||
| Sort Code | SWIFT / BIC: | ||
| Account Number | IBAN No: | ||
| Currency | Payment ref |
If Interest to be paid out, in EUR, to the Client, it shall be paid to the following account:
| Bank name | Bank branch | ||
| Account name | Bank postcode | ||
| Sort Code | SWIFT / BIC: | ||
| Account Number | IBAN No: | ||
| Currency | Payment ref |
If Interest to be paid out, in USD, to the Client, it shall be paid to the following account:
| Bank name | Bank branch | ||
| Account name | Bank postcode | ||
| Sort Code | SWIFT / BIC: | ||
| Account Number | IBAN No: | ||
| Currency | Payment ref |
6. Client requesting that Margin is returned to it.
6.1 The Client may request that an amount of Margin that it has paid to CSL is returned to it at any stage during a Live Contract.
6.2 CSL:
(a) is under no obligation to return Margin to the Client; and
(b) has complete discretion as to whether it returns Margin to the Client.
6.3 If Margin is returned to the Client, the Client will cease to earn Interest on that Margin.
7. Confidentiality
7.1 Obligations of confidentiality. Each party undertakes that it shall not at any time during this agreement, and for a period of five years after termination of this agreement, disclose to any person any confidential information concerning the business, affairs, customers, clients or suppliers of the other party or of any member of the group of companies to which the other party belongs including the details of this agreement, except as permitted by clause 7.2.
7.2 Confidentiality exceptions. Each party may disclose the other party’s confidential information:
(a) to its employees, officers, representatives or advisers who need to know such information for the purposes of carrying out the party’s obligations under this agreement. Each party shall procure that its employees, officers, representatives or advisers to whom it discloses the other party’s confidential information comply with this clause 7; and
(b) as may be required by law, a court of competent jurisdiction or any governmental or regulatory authority.
7.3 Limited use of confidential information. No party shall use any other party’s confidential information for any purpose other than to perform its obligations under this agreement, the CSL Payment Terms or the CSL Derivative Terms.
7.4 Return of documents and records. All documents and other records (in whatever form) containing confidential information supplied to or acquired by the Client from CSL shall be returned promptly to CSL on termination or expiry of this agreement, and no copies shall be kept, whether digitally or otherwise.
8. Limitation of liability
8.1 Unlimited liability. Nothing in this agreement shall limit or exclude the liability of either party for:
(a) Death or personal injury. Death or personal injury caused by its negligence, or the negligence of its employees, agents or subcontractors (as applicable).
(b) Fraud. Fraud or fraudulent misrepresentation or wilful default.
(c) Unlawful liability restrictions. Any matter in respect of which it would be unlawful to exclude or restrict liability.
8.2 Limitations of liability. Subject to clause 8.1 above, neither party shall under any circumstances whatever be liable to the other, whether in contract, tort (including negligence), breach of statutory duty, or otherwise, for:
(a) any loss of profit, sales, revenue, or business;
(b) loss of anticipated savings;
(c) loss of or damage to goodwill;
(d) loss of agreements or contracts;
(e) loss of use or corruption of software, data or information;
(f) any loss arising out of the lawful termination of this agreement or any decision not to renew its term, or
(g) any loss that is an indirect or secondary consequence of any act or omission of the party in question.
9. Termination
9.1 Termination on notice with cause. Without affecting any other right or remedy available to it, either party may terminate this agreement with immediate effect by giving written notice to the other party if:
(a) the other party fails to pay any amount due under this agreement on the due date for payment and remains in default not less than 90 days after being notified in writing to make such payment;
(b) the other party commits a material breach of any term of this agreement which breach is irremediable or (if such breach is remediable) fails to remedy that breach within a period of 30 days after being notified in writing to do so;
(c) the other party repeatedly breaches any of the terms of this agreement in such a manner as to reasonably justify the opinion that its conduct is inconsistent with it having the intention or ability to give effect to the terms of this agreement;
(d) the other party suspends, or threatens to suspend, payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts or is deemed unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986;
(e) the other party commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for or enters into any compromise or arrangement with its creditors other than for the sole purpose of a scheme for a solvent amalgamation of that other party with one or more other companies or the solvent reconstruction of that other party;
(f) a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of that other party other than for the sole purpose of a scheme for a solvent amalgamation of that other party with one or more other companies or the solvent reconstruction of that other party;
(g) an application is made to court, or an order is made, for the appointment of an administrator, or if a notice of intention to appoint an administrator is given or if an administrator is appointed, over the other party;
(h) the holder of a qualifying floating charge over the assets of that other party has become entitled to appoint or has appointed an administrative receiver;
(i) a person becomes entitled to appoint a receiver over the assets of the other party or a receiver is appointed over the assets of the other party;
(j) the other party (being an individual) is the subject of a bankruptcy petition or order;
(k) a creditor or encumbrancer of the other party attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued against, the whole or any part of the other party’s assets and such attachment or process is not discharged within 14 days;
(l) any event occurs, or proceeding is taken, with respect to the other party in any jurisdiction to which it is subject that has an effect equivalent or similar to any of the events mentioned in paragraph (d) to paragraph (k) (inclusive);
(m) the other party suspends or ceases, or threatens to suspend or cease, carrying on all or a substantial part of its business;
(n) there is a change of control of the other party (within the meaning of section 1124 of the Corporation Tax Act 2010);
(o) requested to by any regulator, such as the Financial Conduct Authority; or
(p) it becomes of the view, acting reasonably, that for it to continue complying with its obligations under this agreement would breach any law, regulation or guidance.
9.2 Termination with notice and cause. Without affecting any other right or remedy available to it, CSL may terminate this agreement with immediate effect by giving written notice to the Client if the Client:
(a) (being an individual) is convicted of any criminal offence (other than an offence under any road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed);
(b) commits any fraud or dishonesty or acts in any manner which in the opinion of CSL brings or is likely to bring CSL into disrepute or is materially adverse to the interests of CSL;
(c) dies or, by reason of illness or incapacity (whether mental or physical), is incapable of managing his own affairs or becomes a patient under any mental health legislation.
9.3 Termination with notice but without cause. Either party may terminate this agreement without cause on giving not less than 30 days’ notice to the other party.
10. Consequences of termination
10.1 Clauses to remain in force on termination. On termination of this agreement the following clauses shall continue in force: clause 7 (Confidentiality), clause 8 (Limitation of Liability) and clauses 10 to 19 (inclusive).
10.2 Accrued rights. Termination of this agreement shall not affect any rights, remedies, obligations or liabilities of the parties that have accrued up to the date of termination, including the right to claim damages in respect of any breach of the agreement which existed at or before the date of termination.
10.3 Interest payments upon termination or expiry of this agreement. Interest shall stop accruing from the date of termination of this agreement onwards. For the avoidance of doubt:
(a) the termination of this agreement shall not otherwise impact any Live Contracts; and
(b) the Client shall not have any right to have any amount of money paid to it (for example, representing Margin already paid to CSL) other than Interest which accrued prior to the date of termination of this agreement.
11. No partnership or agency
11.1 No partnership or agency between the parties. Nothing in this agreement is intended to, or shall be deemed to, establish any partnership or joint venture between any of the parties, constitute any party the agent of another party, or authorise any party to make or enter into any commitments for or on behalf of any other party.
11.2 No agency on behalf of third party. Each party confirms it is acting on its own behalf and not for the benefit of any other person.
12. Entire agreement
12.1 Entire agreement. This agreement constitutes the entire agreement between the parties in relation to Interest and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to Interest.
12.2 No reliance on matters outside agreement. Each party acknowledges that in entering into this agreement it does not rely on, and shall have no remedies in respect of, any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this agreement.
12.3 Misrepresentation and misstatement. Each party agrees that it shall have no claim for innocent or negligent misrepresentation or negligent misstatement based on any statement in this agreement.
12.4 Fraud. Nothing in this clause shall limit or exclude any liability for fraud.
13. Amendments
CSL may amend this agreement by giving the Client 30 Business Days’ notice in writing and such amendment shall be binding on the Client.
14. Assignment and other dealings
This agreement is personal to the parties and neither party shall assign, transfer, mortgage, charge, subcontract, declare a trust over or deal in any other manner with any of its rights and obligations under this agreement.
15. No automatic waiver
15.1 No failure or delay by a party to exercise any right or remedy provided under this agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy.
15.2 No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy.
16. Severance
16.1 Deemed modification or deletion. If any provision or part-provision of this agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this clause shall not affect the validity and enforceability of the rest of this agreement.
16.2 Obligation to negotiate compliance amendments. If any provision or part-provision of this agreement is invalid, illegal or unenforceable, the parties shall negotiate in good faith to amend such provision so that, as amended, it is legal, valid and enforceable, and, to the greatest extent possible, achieves the intended commercial result of the original provision.
17. Notices
17.1 Form of notices. Any notice or other communication given to a party under or in connection with this agreement shall be in writing and shall be:
(a) addressed to that party at its address set out in the "Parties " section of the agreement as same may be updated from time to time by notice in writing to the other party or at its registered address (if being delivered personally, or sent by pre paid first class post or other next Business Day delivery service, or by commercial courier); or
(b) sent by email to:
(i) compliance@currencysolutions.com and finance@currencysolutions.com for CSL; and
(ii) Email address for the Client specified in the Proposal Term Sheet
as same may be updated from time to time by notice in writing to the other party.
17.2 Deemed receipt of notices. A notice or other communication shall be deemed to have been received:
(a) if delivered personally, when left at the address referred to in clause 17.1;
(b) if sent by pre-paid first class post or other next Business Day delivery service, at 9.00 am on the second Business Day after posting;
(c) if delivered by commercial courier, on the date and at the time that the courier’s delivery receipt is signed; or
(d) if sent by email, one Business Day after transmission.
17.3 Exclusions from notice provisions. This clause does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution.
18. Counterparts
18.1 Transmission of an executed counterpart of this agreement (but for the avoidance of doubt not just a signature page) by email (in PDF, JPEG or other agreed format) or the use of PDF signing software shall take effect as delivery of an executed counterpart of this agreement. If either method of delivery is adopted, without prejudice to the validity of the agreement thus made, each party shall provide the others with the original of such counterpart as soon as reasonably possible thereafter.
18.2 No counterpart shall be effective until each party has executed and delivered at least one counterpart.
19. Governing law and jurisdiction
19.1 This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.
19.2 Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this agreement or its subject matter or formation (including non-contractual disputes or claims).
This agreement has been entered into on the date stated at the beginning of it.
