The Travelex International Payments Service is provided by NZForex Limited (CN: 2514293) (“NZForex”). Any reference on this page to "we", "us", or "our" is a reference to NZForex.
The NZForex Product Information sets out:
NOTE: If any words are capitalised, please refer to the definition section at the end of this document.
1 GENERAL INFORMATION
1.1 Service Provider
The Travelex International Payments service is provided by NZForex Limited (CN: 2514293) (“NZForex”). NZForex is part of the global OzForex Group of Companies. NZForex is a wholly owned subsidiary of OzForex Limited (ABN: 65 092 375 703), an Australian company.
NZForex is registered as a financial service provider on the Financial Service Providers Register (established by the Financial Service Providers (Registration and Dispute Resolution) Act 2008). NZForex’s parent company OzForex holds an Australian Financial Services Licence (No: 226 484) allowing it to deal and advise in relation to foreign exchange Transactions. As an AFSL holder, OZForex is regulated by the Australian Securities and Investment Commission ("ASIC"). It is audited by PricewaterhouseCoopers and is subject to the reporting and disclosure obligations that apply to financial advisers under the Corporations Act 2001 in Australia.
1.2 No Personal or Independent Advice
The information contained in this document is general in nature and is provided purely for information purposes. You will also find on our website some useful historical data and some charting and research tools. Additionally, we may also provide you with general oral advice about how foreign exchange transfers work during the course of our dealings with you. We recommend that you carefully consider all the potential outcomes of specific foreign exchange trades and strategies before entering into any of the foreign exchange transaction. Before acting on any information, you should consider the appropriateness of it and the relevant foreign exchange product having regard to your objectives, financial situation and needs. In particular, you should obtain independent financial advice as to the amount, type and timing of any particular Transaction you enter into with us.
1.3 Client Agreement
You will need to enter into a Client Agreement with us before we provide you with our service. This agreement sets out the rights and obligations applicable to you. The Travelex International Payments service is offered only to individuals who are transferring funds privately. If you are a sole proprietor of a business or representing a trust, partnership, company or commercial organisation, we are unable to service you under the terms and conditions of the Travelex International Payments service. Please ensure that you identify yourself as a sole proprietor of a business, as a trustee of a trust or as a partner of a partnership or as a representative of a company or commercial organisation when registering for this service. You must ensure that you fully understand the terms set out in the relevant Client Agreement before you transact with us.
The following is an overview of the key contractual provisions in our Client Agreement:
• No Obligation to Accept Instructions or Process Transactions - While we will always endeavour to comply with your Instructions as quickly as possible, there may be circumstances in which we are unable to do so. Therefore, we always reserve the right to refuse to accept your Instructions and to do so without giving you any reasons and without incurring any liability to you.
• Transaction Binding - If you wish to enter into a transaction, you may do so by giving us Instructions online, by telephone or by email. The transaction will be legally binding on you when we receive your Instructions.
• Cancellation - Once a transaction has become legally binding, you may not cancel the transaction in any circumstances.
• Funds Held by Us - You acknowledge and agree that we do not hold your funds on trust and will not put your funds into a separate bank account.
• Payment of Full Amount on Settlement - You must always pay to us the full amount of the funds you are transmitting on the due date (less any Advance Payments already made). We do not facilitate any form of margin or speculative foreign exchange trading, so we do allow you to pay or receive only the amount of any loss or profit occasioned by exchange rate fluctuations. If you want to speculate on exchange rates, our service is not for you.
• Closing Out Transactions - If you fail to make any payment when it is due, you will be breaching your contract with us and we will Close Out the transaction you have booked. This could result in a loss to us which we will ask you to pay.
1.4 Contact Us
If you do not understand any part of this document or anything on our website, or require further information, please contact NZForex by telephone on 0800 161 088 or email our Compliance Officer at firstname.lastname@example.org .
2 THE SERVICE
2.1 Our Service
We provide a 24 hour international online money transfer service. You can instruct us to send your funds overseas either immediately (ie: within the next 2 days) or at any time within the next 12 months and you can enter into an arrangement that is legally binding immediately or legally binding only in certain circumstances.
2.2 Accessing and Using the Service
You can access our service directly online, by telephone or by email. We do not accept communications by fax. The simplest way to access our service is to register on our website at https://internationalpayments.travelex.co.nz. Registration is quick, costs nothing and is obligation free. When you register with us, you will be asked to agree to the terms of our Client Agreement. If you are an individual, you may do so by clicking on the “I Agree” button on our website. Once we have verified your identity, your registration will be complete and you can begin to transact with us. Once registered, if you want to transact:
• By phone, you will need to call us and speak to one of our dealers to book your deal. We provide the same rates by phone on 0800 161 088 as we do online.
• Online, you will need to log in using your username and password. You can then book a transaction online using either (a) the auto-confirm transaction option or (b) the online booking confirmation option.
• By Email, once you have included all the details in your online Beneficiary (payee) library, you can send us the transaction details by email and we can have them entered into our system for you. It you book a transaction by email, the transaction will be binding on you when we process your email. You acknowledge that, if you choose to book a transaction by email, it may not be processed immediately. When we process your Instructions, we will then send you an email headed “Deal Confirmation”.
After you are fully registered, you can book exchange rates with us 24-hours a day Monday to Friday. When you book your first deal, we will call you to confirm the transaction and discuss payment options. Subsequent payments can be managed completely online (or by phone if you prefer). Once a Transaction is booked, we ask you to pay the money you are transmitting into one of our accounts, either immediately or on the Maturity Date, then we convert it into the foreign currency and credit the Beneficiary Account you have nominated in the agreed amount of the foreign currency. Our service is very quick, but the actual time between booking a Transaction and receiving the money in the Beneficiary Account will vary according to the currencies involved.
2.3 Deliverable Only Service
We are a money transmission business only. In all cases, you must deliver to us the full amount of the funds you are exchanging. We simply transmit money. We do not facilitate any type of margin or leveraged foreign exchange transaction (ie: where you are able to speculate on future exchange rate movements by putting down a deposit and trading a multiple of that deposit). We do not allow you to pay us only the amount of any loss occasioned by exchange movement and in no circumstances will we pay you any profit realised as the result of an exchange rate movement.
2.4 No Cancellation
Once you have booked a Transaction, you cannot cancel it. As soon as a Transaction is booked, we enter into a matching Transaction with our own foreign exchange provider which we have to settle whether or not you settle your Transaction. If you fail to deliver to us the full amount of the money you are transferring on the due date, or you fail to deliver any advance payment we have requested, we will close out the Transaction. Closing out a Transaction involves reversing the Transaction we have entered into with our own provider. Sometimes, we will realise a loss on the reversed Transaction as a result of exchange rate fluctuations. If there is a loss, we will ask you to pay any loss immediately. In no circumstances will we pay you any profit realised by us if we close out a Transaction that you have failed to settle.
We provide general information in relation to foreign currency transactions. You will find on our website some useful historical data and some charting and research tools. We can also provide you with general oral advice about how foreign exchange transactions work. Please note however that none of the information we provide to you, either on our website or over the phone, will take into account your personal financial circumstances and needs. You will always need to exercise your own judgement and should obtain independent financial advice as to the amount, type and timing of any particular transaction you enter into with us.
3.1 What is Foreign Exchange?
The term foreign exchange refers to the simultaneous purchase of one currency and sale of another currency at an agreed exchange rate. The exchange rate is the price at which one currency can be bought or sold in exchange for another currency. When you are comparing exchange rates offered by different providers, you need to consider both the exchange rate that is quoted and any transaction fees that may be applicable. For example, a good exchange rate may be accompanied by high transaction fees, so you need to take both into account.
3.2 Exchange Rates
The "exchange rate" is the price at which one currency can be bought or sold in exchange for another currency. An exchange rate is the price of one currency expressed in terms of another currency. For example, if the current exchange rate for the New Zealand dollar against the Australian dollar is 0.7894, this means that a New Zealand dollar is equal to, or can be exchanged for, approximately 79 Australian cents.
3.3 Quotation of Exchange Rates
The foreign currency market is an over-the-counter ("OTC") market, which means that there is no official or benchmark exchange rate for foreign currencies. Different service providers will quote different exchange rates at different times of the day. We cannot guarantee to offer the best rate available on the day, but we endeavour to be very competitive and will try to match any better rates.
3.4 Exchange Rate Fluctuation
Exchange rates fluctuate constantly and thereby give rise to risk and uncertainty.
We make our profit primarily from our Margin. The Margin refers to the difference between the rate we obtain from our own providers on the wholesale foreign exchange market (which we refer to as the Interbank Spot Rate) and the rate we quote you. The Margin will vary from currency to currency and from time to time. While we do not disclose our Margin on every Transaction, you are always free to compare the exchange rate we quote you with other providers to ensure that we are offering you a good rate.
3.6 Transaction Fees
Travelex International Payments charges a small fixed Transaction fee, but only on Transactions under NZD$10,000 (or foreign currency equivalent). This is a separate fee, the amount of which is unrelated to the exchange rate. You must factor this fee into the cost of the Transaction as well. If you are comparing rates, you should bear in mind that an attractive exchange rate may be offset by a high Transaction Fee (or vice versa).
3.7 Counterparty Risk
When you enter into a Transaction with NZForex, moneys you place with us are not held in a separate account or on trust for you. You are therefore assuming a risk in relation to NZForex solvency. While we try to maintain surplus liquid funds at all times, our liabilities are not guaranteed in any way by any other entity in the OzForex Group. However, we do not assume any risk in relation to exchange rate movements ourselves. To reduce your exposure to us, we enter into a hedging transaction with one of our counterparties as soon as you enter into a transaction with us. The risk for you therefore is essentially that one of our counterparties defaults. We use a number of different counterparties at any time. However, they are all large international banks. For example, Barclays Bank PLC in the UK is our primary provider - their details can be located at www.barclays.co.uk. In order for you to assess for yourself our financial ability to meet our counterparty risk, you can obtain a copy of our financial statements, free of charge, by going to the “Our Financial Statements” tab on our website.
4 FOREIGN CURRENCY TRANSACTIONS
4.1 Exchange Rates
As a technical matter, exchange rates are generally quoted in 4 different ways depending on the time for settlement:
(i) Value Today (ie: today or "T");
(ii) Value Tomorrow (ie: 24 hours or "T+1");
(iii) Spot (ie: 48 hours or "T+2"); and
(iv) Forward (ie: any time between 48 hours and 12 months).
We offer only Spot Contract ("T+2") and Forward Contracts, not Value Today or Value Tomorrow Transactions. When comparing rates, you should make sure that you compare only T+2 rates, not T or T+1 rates, as they could be appreciably different.
4.2 Spot and Forward Contracts Only
We offer only Spot and Forward transactions. When you are comparing exchange rates, you need to ensure that you are comparing a Spot Rate with another Spot Rate and not with a Value Today or Value Tomorrow rate, as Value Today or Value Tomorrow rates are calculated on different days and so are not valid comparisons.
We also offer an arrangement whereby you can enter into a Spot Contract or a Forward Contract only when a target exchange rate is reached. For a more detailed explanation of how our limit orders work, please go to paragraph 7.
4.5 Regular Money Transfer
You may ask us to make regular payments on a weekly, monthly or quarterly basis for up to 12 months in advance. You can do so either by allowing us to apply the Spot Rate applicable at the time of each transfer or by setting the exchange rate for each payment in advance. If you choose the first option, you will be effectively entering into a series of Spot Contracts (see Part 5) and may cancel the series of contracts without incurring any liability to pay a loss providing that you give us at least 7 days notice. If you choose the second option, you will effectively be entering into a series of Forward Contracts (see Part 6) and will therefore be bound to settle the transactions in the same way as you would an ordinary Forward Contract and to pay any loss if you cancel one or more contracts in that series.
In either case, you will be asked to pay an Advance Payment (see paragraph 6.6) in the amount of each instalment which will be applied in settlement of the last payment in the series of payments.
5 SPOT CONTRACTS
5.1 What is a Spot Contract?
Whenever you exchange currencies, you are effectively entering into a foreign exchange contract of some kind (ie: this happens when you pay for a purchase overseas by credit card, even though you may not realise it).
If you want us to transmit your money immediately, then you will need to enter into a Spot Contract with us. A Spot Contract is an agreement to exchange one currency for another at an agreed exchange rate within 2 days of the transaction being booked. For example, when you make a purchase overseas in a foreign currency, you may have to pay the purchase price straight away. In those circumstances, your only consideration will be the exchange rate at the time and we will quote you a Spot Rate (you should feel free to obtain quotes from other providers to ensure that our Spot Rate is competitive). When you have agreed to the Spot Rate and entered into the Spot Contract with us, you will have 48 hours to pay the funds into our account and we will then remit the funds immediately to your nominated Beneficiary Account.
If, on the other hand, you do not have to make the payment immediately (ie: the purchase price payable under a contract is not payable for 4 months), you will need to consider whether to lock in the Spot Rate available now or wait for 4 months and hope that the exchange rate is equally, or more, favourable then. If you do not want to take the risk that the exchange rate is less favourable in 4 months time, you can lock in the Spot Rate either by entering into a Spot Contract immediately (and sending the money to an account in the foreign currency, if you have one) or you can do so by way of a Forward Contract, which will allow you to send the money in 4 months time at the Forward Rate.
In a Spot Contract, there are a number of variables that need to be agreed upon, including:
(a) The denomination and amount of the currency being bought.
(b) The denomination and amount of the currency being sold.
(c) The exchange rate.
A Spot Contract must be settled within 2 days of the Transaction being booked. This means that you must pay us the money you are exchanging within 2 days. Actual receipt of the funds transferred by us into your nominated Beneficiary Account will take longer than 2 days and the actual timing of the payment to the Beneficiary Account will depend on the destination of the funds and the intermediary banks involved.
5.4 Spot Contract Exchange Rate
The Spot Rate quoted by us will be calculated by taking into account the Interbank Spot Rate and the Margin.
The following Fees/costs may apply to a Spot Transaction.
The Margin will vary from time to time and from currency to currency. It is not a separate amount that you have to pay, ratherit is built in to the exchange rate. It effectively represents our gross profit margin on each transaction. You can satisfy yourself that our Margin is reasonable by comparing the exchange rate we quote with the rates quoted by other providers. You will need to bear in mind that some providers might quote a good exchange rate, but supplement a narrow margin with high transaction fees.
(b) Transaction Fees
We charge a Transaction Fee which is presently NZD$12.00 (or foreign currency equivalent) for transfers up to NZD$10,000. We do not charge Transaction fees for Transactions over NZD$10,000 (or foreign currency equivalent). If a transaction fee is payable, it will be added to the total amount you are required to settle.
(c) Third Party Transaction Fees
We do not charge you an additional amount for third party transaction fees. They are built into our margin. However, in some cases, the intermediary banks we use to process payments may deduct transaction fees that we have not anticipated. For example, in some jurisdictions, the receiving bank charges a receiving bank fee. We will try and notify you of these additional fees if we are aware of them, but we cannot always do so in advance. In our experience, receiving bank fees tend to be less than AUD$50.00 (or foreign currency equivalent), but this will depend on the relevant jurisdiction. You may therefore find, in some cases, that the total amount you expect to receive in your Beneficiary Account is slightly less because such fees have been deducted. You should bear this in mind if you are paying the precise amount of an invoice, for example. If you have any questions regarding the likelihood of third party transaction fees being levied by intermediary banks for your transaction, you should ask one of our dealers.
5.6 Significant Benefits
The significant benefits of entering into a Spot Contracts with us are:
(i) speed and ease of transferring money.
(ii) certainty in relation to the exchange rate we offer you; and
(iii) access to real time pricing.
5.7 Significant Risks
The significant specific risks involved in entering into a Spot Contract are:
(i) as exchange rates fluctuate quite rapidly, you may find that the rate improves very soon after you lock in a rate or that another provider is offering a slightly better rate at any particular point in time; and
(ii) delays are rare but they do happen; they can be caused by technical or administrative problems experienced by NZForex, Travelex, or by intermediaries for reasons entirely outside NZForex's control.
6 FORWARD CONTRACTS
6.1 What is a Forward Contract?
A Forward Contract is a Transaction that allows you to transfer money at some time (up to 12 months) in the future at an exchange rate that you agree now, so that you know what the exchange rate will be at the time the exchange of currencies becomes necessary. This allows you to avoid the risks and uncertainties associated with adverse exchange rate movements.
6.2 Purpose of a Forward Contract
The purpose of a Forward Contract is primarily to achieve certainty and to avoid possible losses attributable to adverse exchange rate movements. A Forward Contract enables future exchange risk to be avoided (although you may still face a loss if you do not settle the Forward Contract on or before the Maturity Date). A Forward Contract may be useful in the following circumstances:
(a) importing and exporting goods where the invoice is in a foreign currency;
(b) borrowing in foreign currencies;
(c) investing in foreign currencies;
(d) buying or selling property overseas;
(e) receiving pension payments from an overseas jurisdiction; or
(f) repatriating salary or interest payments received overseas.
Forward Contracts can be used by individuals migrating or buying property overseas who want to lock in a good exchange and not take the risk the exchange rate will be worse when they actually need the money.
The variables in a Forward Contract are:
(a) The denomination and amount of the currency being received.
(b) The denomination and amount of the currency being sent.
(c) The exchange rate.
(d) The Maturity Date.
6.4 Forward Rate
In determining the rate of exchange for a Forward Contract, there are two components:
(i) the current Spot Rate; and
(ii) the forward rate adjustment ("Forward Points").
The Forward Rate quoted by NZForex will not be the same as the Spot Rate, because it will take into account the interest costs in holding the money until the Maturity Date. It may be better or worse than the prevailing Spot Rate on the day depending on the difference in interest rates between the country from which the funds are sent and the country to which the funds are being sent.
The calculation of Forward Points is a complicated one. It will be influenced not just by interest rates in the two relevant countries, but also by the duration of the Forward Contract and less tangible factors such as the expected direction of interest rates in the two relevant countries prior to the Maturity Date. You may find that the Forward Points change quite significantly over a short period of time as a result of developments impacting on expectations of future interest rate changes.
6.5 Variation to the Maturity Date
The Maturity Date is the date your Forward Contract expires; in other words, the date on which you are required to send to us the funds you are transmitting. When you enter into a Forward Contract, the Maturity Date will be agreed and cannot be changed without our consent.
We may, upon request but entirely at our discretion, agree to allow you to vary the Maturity Date you have booked. We may allow you to pay some or all of the amount you are transferring early at some time before the Maturity Date (“Pre-Delivery”) or we may allow you to extend the Maturity Date (“Rollover”), but not for longer than 12 months from the date you entered into the transaction. If we do agree to such a variation, the Forward Points will change.
6.6 Advance Payment
All Forward Contracts must be settled by delivery of the full amount being transferred on the Maturity Date (also referred to as the Settlement Date). This means that we must be able to sight the cleared funds in our bank account on or before the Maturity Date. When you enter into a transaction with us, we enter into a matching transaction with our own providers. If you do not settle your transaction, we still have to settle ours. In order to cover the risk that you do not settle your transaction, we ask you to pay some of the settlement payment in advance (“Advance Payment”). The amount of any initial Advance Payment requested will be a fixed percentage of the value of the Transaction and will normally be between 5% and 10% of the value of the Transaction, but could be more depending on the duration of the Forward Transaction. While the amount of any Advance Payment is at NZForex’s complete discretion, as a general guide, short term Advance Payments (with a Maturity Date occurring within 0-3 months) will attract a 5% initial Advance Payment and long dated Forward Transactions(with a Maturity Date occurring within 3-12 months) will incur a 10% Advance Payment.
We will usually ask for an Advance Payment when you enter into a transaction, but the fact that we have not done so does not mean that we will not ask for one later if the exchange rate trends unfavourably. Equally, the fact that you have already made an Advance Payment does not mean that we will not ask for one or more additional Advance Payments if the exchange rate continues to move unfavourably. If we have requested payment of an Advance Payment at any stage of the transaction, you must pay it promptly. We expect to receive the Advance Payment within 48 hours of the request, failing which we reserve the right to Close Out the transaction without notice and ask you to pay the full amount of any loss occasioned by us immediately. We do not pay interest on Advance Payments.
IMPORTANT: You should not enter into a Forward Contract if you are unable or unwilling to pay an initial Advance Payment of between 5% and 10% of the value of the Transaction with the possibility of one or more further Advance Payments being requested at any time prior to the Maturity Date. If we ask you to pay an Advance Payment at any time and fail to do so, we may Close Out your Forward Contract without prior notice.
6.7 Closing Out Transactions
The liability for an adverse exchange rate movement is crystallised at the commencement of the Forward Contract and not on settlement. If you want to calculate your liability to pay a Advance Payment at any point in time prior to the Maturity Date or your liability to pay a loss in the event that the transfer is Closed Out, you need to consider the exchange rate at the time of Closing Out, because Closing Out involves entering into the same Transaction in reverse and selling bought currency back into the market. In the event that a Forward Contract is Closed Out, we will calculate, as at the closing out date, the value of the Transaction using prevailing market rates chosen by us in good faith.
IMPORTANT: If there is a loss on a Transaction that is Closed Out, you will be liable to compensate NZForex immediately upon demand for the full amount of that loss which could exceed the amount of any Advance Payment already held. In no circumstances shall NZForex be liable to pay to you any profit arising from the closing out of a Transaction.
In the case of a Regular Money Transfer, you should not fix the exchange rate in advance for each instalment (see paragraph 4.4) unless you are confident that you will need to make every payment. If, for example, you cancel your instructions after the third of twelve monthly payments, the other nine transactions will be closed out and you will be required to pay any loss which will be deducted from the Advance Payment.
Set out below are the payments that you will need to take into account when deciding whether to enter into a Forward Contract:
(a) Advance Payment – see section 6.6 above;
(b) Margin - see section 5.5(a) above;
(c) Transaction Fees – see section 5.5(b) above. Please note that Transaction Fees may be incurred if you are transferring funds to multiple Beneficiary Accounts; and
(d) Third Party Transaction Fees – see section 5.5(c) above.
6.9 Significant Benefits
The significant benefits of entering into a Forward Contract are:
(i) cash flow certainty; and
(ii) protection from adverse exchange rate movements.
6.10 Significant Risks
The significant specific risks involved in entering into a Forward Contract are:
(i) The opportunity to make financial gains as the result of favourable exchange rate movements is precluded; if you enter into a Forward Contract, you must always settle it on the agreed terms whatever the exchange rate is on the Maturity Date.
(ii) If the reason for entering into the Forward Contract ceases to exist (eg: the relevant supply transfer is cancelled) prior to the Maturity Date, the Forward Contract may need to be Closed Out early and that may result in a loss if the exchange rate has moved unfavourably, as you are not able to cancel the Transaction or transfer your obligations to anybody else.
(iii) An Advance Payment may be requested of at least 5% to 10% of the value of the Transaction either at the beginning of the Transaction or at any time prior to the Maturity Date, so you must ensure that you have the funds available to meet any such request. If for any reason you are unable to pay the Advance Payment, we may Close Out your Transaction without notice.
(iv) Interest will be foregone on the amount of any Advance Payment/s held by us as we do not pay any interest on Advance Payments.
7.1 What is an Order?
You may enter into an agreement with NZForex whereby your Spot Contract or Forward Contract becomes binding only when a certain exchange rate ("Target Rate") is reached. You are able to amend or cancel your Instructions by telephone at any time before the Target Rate is reached. However, once the Target Rate is reached and the Order is filled by us, you are bound to settle the Transaction in accordance with its terms (please see Parts 5 and 6 for a discussion of Spot Contracts and Forward Contracts).
7.2 Terms of Orders
The key terms of an Order may be summarised as follows:
• Legally Binding - An Order will become binding as and from the time that yourInstructions are received by us. You may cancel an Order at any time before the Target Rate is reached by giving us notice by telephone. You may not cancel an Order after the Target Rate has been reached, whether or not we have notified you that the Target Rate has been reached. When the Target Rate is triggered, we will notify your and upon such notification, you will be legally bound by the transaction.
• Target Rate - The Target Rate will be deemed to have been reached only when the exchange rate nominated in your Order has been filled with our provider. This will occur when the rate you have nominated has been exceeded by an amount that includes our Margin. You may find that, in some cases, the exchange rate spikes with the result that the exchange rate you have nominated in your Order has been reached but has changed before we are able to fill the Order with our provider; for the avoidance of doubt, we will not fill your Order in those circumstances.
• Payment - As soon as you receive our notification that the Target Rate has been reached, you must take action to ensure that the funds reach our account by the Maturity Date. If we do not receive the funds in time, we reserve our right to Close Out the transaction.
All of the other considerations in terms of fees and risks should also be considered.
9 GENERAL BENEFITS OF USING NZFOREX SERVICE
Our trading platform offers:
(i) real-time pricing (just login and request a live, and dealable, rate);
(ii) immediate access to a trading platform 24-hours a day Monday to Friday;
(iii) competitive exchange rates;
(iv) accurate Transaction records with your personal Transaction history accessible at anytime by using your personal login on our website;(v) access to market research; and
(vi) visibility to wholesale pricing and a completely transparent service where you can compare our rates against wholesale rates and against your bank’s rates.
10 OTHER SIGNIFICANT RISKS OF USING NZFOREX’S SERVICE
Regardless of whether you purchase a Spot Contract orForward Contract , there are risks you must consider before you enter into any transaction with NZForex.
10.1 Credit Risk
Credit risk is the risk that we will become insolvent and become unable to perform our contractual obligations to you (ie: remit the agreed amount of foreign currency to your Beneficiary Account at the agreed time). When you enter into a Transaction with us, you are reliant on our ability to meet our obligations to you on the terms of each Transaction, so you are taking a risk in relation to our solvency.
10.2 Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed technological systems, internal processes or external events.
We employ the latest and most sophisticated technological security measures, including SSL 128 bit encryption for all data transfers over the internet. We also have in place physical risk reduction processes and procedures, such as locked filing cabinets and restricted access to offices and strategic risk reduction processes such as security clearances and limiting access to a “need-to-know” basis. However, there are significant risks associated with using and relying on a web-based, electronic trading platform. Such risks include, but are not limited to, risks related to the use of software and/or telecommunications systems such as software errors and bugs, delays in telecommunications systems, interrupted service, data supply errors, faults or inaccuracies and security breaches.
While we will use all reasonable efforts to ensure uninterrupted access to the website at all times, we cannot guarantee that such access will never be interrupted as a result of technical or other unforeseen problems as these are matters largely outside our control. We therefore reserve the right to suspend or terminate access to the website at any time and without prior notice and we can’t accept any liability for any loss caused by lack of access to our system or for any errors in the software and/or related information systems.
There are important provisions relating to the use of the trading platforms on our website in our Website Use Agreement and in our Client Agreement. You must ensure that you fully understand these provisions and the risks involved in relying on an on-line, electronic trading system and the limitations in the service that NZForex can provide in relation to the trading platforms.
10.3 Discretionary Powers of NZForex
We have a number of discretionary powers which may affect your trading activities, including the right to Close Out your Transction(s) without prior notice to you. We refer you to the Client Agreement which sets out these powers and suggest that you should fully understand them before entering into a Transaction. You should understand that we may refuse to enter into a Transaction, or Close Out any open Transcations, without notice, in circumstances such as the following:
• if you fail to make any payment when it is due, including the payment of any Advance Payment that has been requested by us;
• if you fail to provide any material information we have requested or any information you have given us is or becomes, in our opinion, materially inaccurate or misleading;
• in the event of your death or loss of mental capacity;
• if bankruptcy or winding up proceedings are commenced against you;
• if the performance of our obligations as per this document becomes illegal;
• if a serious dispute has arisen between us; or
• if you breach an important term of our Client Agreement or of any Transaction.
You should be aware that we may be obliged to freeze or block your account if information comes to our attention that leads us to believe that it is being used in connection with money laundering or terrorist financing activities or if we are directed to do so by a regulatory authority. If this occurs, we will not be liable to you for any consequential losses whatsoever and you agree to indemnify us if we suffer loss as a result of action taken by a third party beneficiary arising from any such action we have taken in relation to your account.
10.4 Foreign Exchange Risk
Once you have entered into a Spot Contract or a Forward Contract with us, you will have locked in an exchange rate, so your Transactionwill not be affected by subsequent exchange rate movements; you will be protected from adverse exchange rate movements and, equally, you will be precluded from benefitting from favourable exchange rate movements. However, in deciding whether or not to enter into a Spot Contract or a Forward Contract, you need to appreciate the risk of not doing so.
Foreign exchange currency markets are subject to many influences which may result in rapid currency fluctuations. Those influences are unpredictable and often entirely unforeseen. They include such things as changes in a country’s political condition, changes in the global economic climate and natural disasters, all of which may substantially affect the price or availability of a given currency.
11 APPLICABLE LAWS
11.2 Money Laundering Regulations
By entering into the Client Agreement, you undertake that you will not knowingly do anything to put NZForex in breach of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 and other subordinate rules (AML/CFT Laws). You undertake to notify NZForex if you are aware of anything that would put NZForex in breach of the AML/CFT Laws. NZForex is required to comply with these laws, including the need to establish your identity (and, if relevant, the identity of other persons associated with your account). Instructions for completion of the identification process are included in the Client Agreement that you will need to complete. Additionally, from time to time, we may require further information to assist with this process.
As a result of our obligations under money laundering regulations, we reserve the right to refuse at any time and entirely at our discretion, to accept you as a client and to refuse to provide you with our service without explaining our reasons for doing so and without incurring any liability to you as a result of such a decision. This would usually happen before we transact with you if you failed to satisfy our internal identification requirements, but there may also be circumstances in which we are obliged to refuse to continue to provide our service to you after we have accepted you as a client and even though we have transacted with you in the past. This could happen if, for example, it came to our attention that information you provided to us when you registered subsequently appeared to be misleading or incorrect. In certain circumstances, we may not be able to transact with you or other persons associated with your account and may be obliged to delay processing a transaction, block or freeze an account where used in connection with Illegal Activities or suspected Illegal Activities. If this occurs, we are not liable to you for any consequences or losses whatsoever and you agree to indemnify us if we are found liable to a third party in connection with the freezing or blocking of your account.
12 TAX IMPLICATIONS
12.1 Independent Tax Advice
There may be tax implications associated with any transaction you enter into with us and the relevant tax rules or their interpretation may change from time to time. If there are any tax considerations, they are likely to arise from the nature or purpose of the relevant transfer of funds, rather from the fact of the transfer itself, and will therefore be different for everybody. You are therefore encouraged to seek independent professional tax advice prior to entering into any Transaction with us.
13 DISPUTE RESOLUTION PROCESS
13.1 Internal Complaints Procedure
13.2 Approved Dispute Resolution Scheme
If the dispute cannot be resolved under our internal disputes policy, you may formally submit the dispute to the approved dispute resolution scheme of which we are a member for the purposes of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 for determination in accordance with the rules of that scheme. For more information, please refer to the Complaints Handling Policy on our website.
13.3 Recovery of Sums Payable by You in Court
If we Close Out a Transaction and you become liable to pay us an amount by way of loss on the Transaction, we will pursue any such unpaid amount immediately through legal action in court. Any such recovery action shall not be subject to our internal complaints procedure or to arbitration.
Advance Payment means a part payment of the amount being exchanged in such amount as we shall deem necessary to cover our Settlement Risk.
AUD means Australian Dollar.
Beneficiary Account means the bank account nominated by you to which we send your funds that could be an account in your name or an account of a third party (ie: a party whom you are paying for goods or services).
Client Agreement means the umbrella agreement that we will ask you to enter into before we begin transacting with you, and shall include any addendum to such agreements.
Close Out means cancelling the transaction and selling back the currency we have bought for you when you entered into the transaction.
Currency Pair means the two currencies that are the subject of the Transaction.
Delivery means payment to us of the full amount of the currency you are exchanging (less any Advance Payment already made).
Fees means all fees, costs and charges associated with your transaction.
Forward Contract means an agreement where one currency is sold or bought against another currency at an agreed exchange rate for settlement on a specified date in the future.
Forward Points means the amount by which a Forward Rate varies from the Spot Rate as a result of the differential in interest rates between the countries of the Currency Pair.
Forward Rate means the Spot Rate adjusted to a future date having regard primarily to the interest rates prevailing in the two countries in the Currency Pair.
Instructions means a request made by you to enter into a transaction.
Interbank Spot Rate means the wholesale Spot Rate that we receive from the foreign exchange interbank market, being a preferential transfer rate given to organisations conducting large and frequent transactions.
Margin means the difference between the exchange rate we pay our provider, which we access through the wholesale foreign exchange market, and the rate that we quote to you.
Maturity Date means the agreed Settlement Date which may be brought forward or extended by NZForex at its discretion.
NZD means New Zealand dollar.
OzForex means OzForex Limited (ACN: 092 375 703), an Australian company.
OzForex Group means OzForex Limited and its related bodies corporate including NZForex Limited, CanadianForex Limited, UKForex Limited, OzForex (HK) Limited and USForex Inc.
Regular Money Transfer means an instruction to make payments on a weekly, monthly or quarterly basis up to 12 months in advance either by way of a series of Spot Contracts or by way of a series of Forward Contracts.
Settlement Date means the date on which the funds that are being exchanged must be received by us.
Settlement Risk means the risk we assume that you will fail to settle a Transaction in accordance with its terms and that a loss will be realised by us as a consequence of exchange rate fluctuations.
Spot refers to a foreign exchange transfer that must be settled within 2 days (48 hours) and is sometimes referred to as T+2.
Spot Contract means an agreement to exchange one currency for another at an agreed exchange rate within 2 days of the transaction being booked.
Spot Rate means the exchange rate for settlement within 2 business days from the date the Transaction was booked.
Transaction Fee means a fixed fee charged on smaller Transactions to cover administrative costs.
Travelex means Travelex Financial Services NZ Limited (Company No: 115663) and having its registered office at Level 14, Brookfield House, 19 Victoria Street, Auckland, registered in New Zealand (“Travelex”).
Value Today refers to a foreign exchange transfer that must be settled on the day it is entered into.
Value Tomorrow refers to a foreign exchange transfer that must be settled within 1 day (24 hours) and is sometimes referred to as T+1.
We or Us means NZForex Limited (CN: 2514293).
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