This document sets out our standard business practices and terms and conditions of dealing with our FX customers and establishes the basis on which we can provide our customers with pricing and execution of their trade requests.
Each customer or its agent should independently evaluate for the benefit of the customer the appropriateness of an FX transaction. Customer Trade Requests General A customer may submit its trade request in the form of an order or an instruction. Deutsche Bank is not under any obligation to accept and act upon any customer trade request in any form including voice and electronic , subject to any applicable terms and conditions.
Except as may be required by such terms and conditions or applicable law, Deutsche Bank may return an accepted trade request to the customer at any time, and acceptance of a trade request does not oblige Deutsche Bank to enter into any FX transaction with a customer, in whole or in part.
Electronic trading When a customer transmits a trade request to Deutsche Bank on any electronic platform including any platform operated by a third party , Deutsche Bank shall follow the procedures agreed with the customer such as set out in this document and in any agreement or terms for electronic trading and, where not conflicting, those applicable to the relevant execution method and platform.
As part of the trade acceptance process operated by Deutsche Bank, we may apply a number of risk management and operational controls automatically before a trade request is accepted or rejected such as a price check, limits on counterparty exposure, credit checks, permissioning of currency pairs, and other controls. This control may be applied immediately upon receipt of a submitted trade request and application of all other last look checks, or after a short delay.
Otherwise, subject to other controls and the agreement between us, Deutsche Bank will accept the trade request. The default setting by which Deutsche Bank operates the price check control is to reject trade requests when the price has moved during the period of delay against Deutsche Bank rather than when price movements have gone in its favour in excess of the relevant price tolerance.
Deutsche Bank employs an asymmetric price check by default because it believes, in general, that this allows Deutsche Bank to provide customers with a deeper, more consistent liquidity offering, at tighter pricing and higher fill rates than it otherwise could.
The application of asymmetric price checks may result in a lower proportion of trades being accepted where the price moves against Deutsche Bank during the period of delay than where the price moves in its favour.
Subject to the procedures and technical capability of the electronic platform customers transact through, customers who prefer to trade subject to a symmetric price check may opt out of the default setting. This choice will result in Deutsche Bank rejecting trades when a price movement for the requested currency pair during the period of delay exceeds the relevant tolerance for that customer, regardless of whether the price moves in favour of or against Deutsche Bank on that trade request.
The application of the price check feature of last look allows Deutsche Bank to manage the risk posed by technological anomalies and latencies as well as to protect itself from certain adverse trading behaviours and market conditions. For example, if a customer engages in activities such as aggregation, order splitting or stale quote selection this may result in more rejected trade requests.
The factors applicable to one customer may differ from those applicable to other customers and may lead to differences in pricing, duration of delay and acceptance rates among customers. Deutsche Bank is not obligated to provide pricing, price streaming or accept trade requests and all determinations of if, whether, or when market criteria have been met for execution shall be made by us in our sole discretion.
In line with market practice, Deutsche Bank's electronic trading platforms have position limits, volatility and other controls, that in each case may temporarily suspend execution, pricing and price streaming. It is possible that different customers submitting trade requests with similar profiles may achieve different outcomes, including whether and when such trade requests will be executed.
As these factors may vary, Deutsche Bank may offer different prices to different customers for the same or similar FX transactions or components of such FX transactions. For any given customer, different pricing may apply to different types of trade requests depending upon the factors noted above. Deutsche Bank may also be compensated in the form of an agreed fee. Pricing provided by Deutsche Bank may be based upon or include pre-determined pricing for tiered levels of: Customer Information Deutsche Bank may use the economic terms of customer trade requests and transactions internally and provide such information to third parties to accomplish transaction execution, risk management and other goals.
Deutsche Bank limits such use and disclosure in a manner consistent with applicable law. Deutsche Bank may need to determine appropriate pricing by sourcing liquidity from a Deutsche Bank trading desk or by transacting with third parties. In addition, as Deutsche Bank will manage the resulting risk of a requested FX transaction including market, liquidity and credit risks on an individual, portfolio, or other basis, it may be necessary for Deutsche Bank to execute one or more risk mitigating transactions.
With regard to executed FX transactions, Deutsche Bank reviews the economic terms on an individual transaction and aggregate basis to assess the impact on market, liquidity and credit risks. All information provided to a customer by Deutsche Bank unless already in the public domain should be treated as confidential and should not be disclosed by a customer to any third party.
Please note that Deutsche Bank has regulatory and other duties to supervise and control its business. Deutsche Bank shares information as necessary to fulfil these responsibilities and respond to general and specific regulatory and other requests with which it is required to comply. Deutsche Bank Trading General Deutsche Bank may execute FX transactions for its own account or for the benefit of other customers prior to execution of any trade request that a customer has placed with Deutsche Bank.
Deutsche Bank may also engage in risk management activities prior to or at the same time as executing a transaction with a customer. These risk management activities may include trading in the same FX product or currencies, trading in correlated products or currencies, and establishing derivatives positions on any of the foregoing, and may also take account of other sources of exposure such as market dislocations and disruptions.
For resting orders, Deutsche Bank reserves the right to retain all or part of any price improvements in the market. Orders submitted to Deutsche Bank through an electronic interface, platform or connection will be time stamped when they are submitted and when they are accepted. Deutsche Bank may receive multiple trade requests from different parties and Deutsche Bank retains discretion as to how to meet such requests, including timing, priority, pricing, aggregation and completeness of execution.
Deutsche Bank also will use its judgement based upon available market and internal information, including, but not limited to, available price levels and actual liquidity available during circumstances such as a disruption event, to determine whether the parameters of a trade request have been satisfied and the extent to which the requested amount of a trade request can be satisfied under prevailing conditions to enable execution of a transaction in whole or in part.
When a customer instructs Deutsche Bank to work a trade request over any period of time or to otherwise execute at a level that is not yet determined, Deutsche Bank will seek to execute the trade request at a price that is reasonable given any relevant factors, including but not limited to, the prevailing market conditions. In doing so, Deutsche Bank may enter into risk management transactions at different times and prices to be able to execute the trade request.
In executing any trade request, Deutsche Bank may have recourse to internal or external sources of liquidity at its discretion. For the avoidance of doubt, unless agreed otherwise in writing Deutsche Bank will always act as principal in respect of any FX transaction executed by means of an execution tool. Customers should ensure that any execution tool that they designate in an instruction to Deutsche Bank is appropriate for their needs. The output or offering of any execution tool is not investment advice or a recommendation.
The results obtained from any execution tool may depend on the validity of the assumptions underlying it and prevailing market conditions may impact these assumptions.
Deutsche Bank may benefit from reduced transaction costs when executing through certain internal or external trading venues and, if we have an investment in, or other relationship with, an external venue, Deutsche Bank may receive other benefits as a result of that interest.
While handling customer trade requests, Deutsche Bank may continue to establish, maintain, modify and terminate positions for its own account in the same FX products in which its customers trade to ensure that it has sufficient capacity to meet anticipated customer demand or respond to market movements.
Deutsche Bank is a market maker across currencies and products, with employees trading across global locations on a continuous basis whenever markets are open for trading. The ideas that form the basis of Deutsche Bank trading decisions are often shared with Deutsche Bank customers as trade ideas or market colour, upon which Deutsche Bank customers may or may not act.
It is possible, therefore, that Deutsche Bank could have positions for its own account that are the same, similar, different or opposite to the positions of its customers. Further, customers should be aware that Deutsche Bank may enter into, unwind, terminate, or close out all or part of an FX transaction with a third party at any time. This may occur before, during, or after the time at which: They may affect whether provisions of an FX transaction are triggered such as option strike prices, barriers or resets, and may affect baskets or indices.
Orders for Benchmark Prices at Specified Fixing Times Orders for transactions whose pricing is set by reference to certain FX benchmarks can create additional concerns for transaction execution and management of related risks. Risk management practices will often result in execution of hedging transactions prior to or during the Fixing Window itself because of a number of factors, including, but not limited to, changes in the full amount and direction of customer orders prior to the Fixing Window and variations in markets during this period.
Given that other market participants may face the same challenge, the volume of transactions prior to or during the Fixing Window may increase, and such transactions may impact the ultimate benchmark fixing and may also impact pricing and volatility of related FX markets. Deutsche Bank engages in other ordinary course of business activities that may impact a benchmark rate, including sourcing liquidity for other customer orders that are unrelated to a benchmark fixing, or acting as a market maker or engaging in risk management activities.
Such activities may cause Deutsche Bank to execute unrelated FX transactions prior to or during a Fixing Window or at other times that may impact transactions relating to a benchmark fixing and may also impact pricing and volatility in related markets.
While the above describes transaction-based benchmarks, benchmark rates may also be published by central banks, or compiled from dealer surveys such as those sponsored by the Emerging Markets Traders Association , either in the ordinary course or as a fall back in the event that the ordinary course source for the benchmark rate is not available.
Deutsche Bank may participate in dealer surveys. While these submission-based benchmarks differ from the transaction-based benchmarks discussed above, in the event that Deutsche Bank may act as both a submitter and transact in relation to such benchmarks Deutsche Bank has established controls designed to mitigate or avoid potential conflicts of interest.
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