Frequently Asked Questions

Foreign Exchange Rate Integrity® (FXRI®) is an independent FX transaction cost analysis and compliance review. Working from your own trade records, Blades International back-tests every transaction against the interbank mid-market rate at the moment it was dealt, using rates from Bloomberg, BestX and other leading market data services. The result shows what each bank or provider actually charged, trade by trade.

That transparency is the foundation for the rest of the service: negotiating a written, pre-agreed spread over the interbank mid-market rate, and then monitoring each provider's compliance month after month.

The markup, or spread, is the difference between the rate you were given and the interbank mid-market rate at the moment of execution. It is never itemized on an invoice: treasury sees a rate, not the markup.

The rate is set either by a foreign exchange trader when you call, or, if you use a bank's online system, by a formula. The factors include (1) the amount of the FX purchase, (2) your bank relationship, (3) how much volume you typically do, and (4) the specific currency, along with other market factors. Most middle-market and smaller companies do not know their markup. With our understanding of how banks set FX markups for good clients, Blades International can help you get a markup that is good for you and fair for the bank.

Yes, and banks are entitled to be paid. They take risk, commit capital and provide service, and every FX price carries a margin over the interbank mid; that is how the desk is paid. The issue is not that a spread exists, or that it varies. It is that the buyer cannot see it, so cannot price the relationship.

If the margin really is thin, measuring it confirms the story. A written pre-agreed spread turns the assurance into something you can check.

Knowing your markups shows you, and your management, what the bank earns on your FX, a cost that otherwise never appears on a statement. That knowledge is the basis for any negotiation: the more a client knows about how banks make money, the better its position. Our clients have seen average markups fall from 54 to 10 basis points, and from 318 to 50.

The work can also be part of a process-improvement plan. As more FX moves to online platforms and automated payments, and fewer trades go through a trader, knowing your markups matters even more.

Regulators in the US, the UK and elsewhere have levied enormous fines against the world's largest banks for manipulating the London fixing in the major currency pairs. That makes for good reading, but it has little to do with how a commercial firm is priced day to day.

The cases that matter more to a corporate treasury are the ones where a bank simply failed to deliver the FX pricing its own contract promised on automated transactions, trade after trade, and no one at the client checked. The lesson is the same either way: the only protection is to measure your own trades.

Smaller programs usually carry the widest spreads, because the price is set by formula or relationship tier and nobody has ever challenged it. Cost per dollar converted tends to fall as volume rises, so the firms that assume they are too small are often paying the most.

Platform competition works well on the large, planned trades. It does not reach subsidiary payments below the threshold, off-hours execution, or the daily accounts payable file, and a platform quote still contains a markup you cannot see.

An RFP prices what you can see: wire fees, account analysis, platform charges. FX markup is rarely a scored line item, and where it appears it is usually an intention rather than a commitment. Blades International specializes in helping clients obtain written, pre-agreed FX spread agreements.

Audit tests whether each trade was authorized, recorded and settled, and it was. What audit generally cannot test is price, because that requires an independent rate for the exact minute of execution. It is a pricing gap sitting inside a clean control environment.

This is the most common case, and usually the most expensive. An automated rate is still a quoted rate with a margin built into the formula, applied thousands of times with nobody looking. The data exists on the bank's side; a standing instruction is how you get it back.

It depends on your volume, currency mix, number of trades, credit, operations and the competitive tension between your providers. Two client results: a global engineering firm with two banks saw its average markup fall from 54 to 10 basis points after a negotiated agreement, and a middle-market transportation company went from 318 basis points to a pre-agreed spread of 50.

For each trade: the trade date, time stamp, time zone, amounts and currencies sold and bought, and currency pair. Nothing else is needed, and please do not send confidential account or payee information.

Ideally, send six months of history, but we can work with less if collecting the data is an onerous task. Include all transactions, including the smaller ones done through a bank's treasury or cash management systems; those deals are usually done at very high margins and may represent a substantial cost.

The time stamp records the exact date and time an FX deal was done. Most banks already show the deal date, deal time and time zone on the confirmation. If they are not in your reporting, a one-page standing instruction has the provider send the data directly.

If a good client trading through a bank's automated system cannot get its time stamps, that is a red flag. Talk to your relationship manager and ask for them. Without an execution time there is no market to measure against.

No. In liquid currency pairs a minute either way moves the mid by a fraction of a basis point, which is immaterial against markups measured in tens. Where there are no time stamps we can show day ranges, and we can help you get precise time stamps going forward.

We receive a narrow slice of your own trade data, and it is sanitized: account numbers and payee identifying information are removed. You stay the owner, and the authorization is revocable in writing at any time. We follow standard data security procedures.

The interbank mid-market rate at the date, time and time zone of your own execution, from independent sources such as Bloomberg, BestX and other leading market data services that the executing bank does not control. That last point matters more than the vendor: the benchmark cannot come from the counterparty being measured.

Not all trades are at the mid, and we do not claim otherwise. The mid is a reference point, not a target price; it is simply the only neutral place to measure from, which is why it is the basis of the spread you negotiate. The question is never why the spread isn't zero. It is whether the spread is reasonable.

The pre-agreed spread should be written to cover both spot and forward trades, and should already account for the credit line. In emerging-market pairs, a client should not pay the bid/offer spread on top of an agreed margin over the mid.

The forward outright is separated into spot and forward points, and each is measured against its own market at execution. Credit is real and belongs in the price, but explicitly. The agreed margin should cover both spot and forward trades.

You receive a report on your historic markups and your FX relationship, showing the pricing your banks applied in basis points and in dollars, and highlighting issues unique to your FX purchasing patterns. If your banks' spreads are fair for your volumes, we will say so, and there is no charge. It is good to know, and you can let your banker know you are watching.

If spreads are too high, we advise on what fair pricing should be and either negotiate directly with your bank or coach you through it, aiming for a written, pre-agreed spread. Once it is in force, we monitor your trades and prove the savings monthly. Variances are documented and, where significant, can warrant a refund; one oil company obtained one within weeks of its first review.

It has not for our clients. The conversation is about data, not accusation, and Blades International talks to bankers in a very diplomatic way. A bank confident in its pricing has no reason to resist the measurement; several have used it to demonstrate the fair-and-reasonable standard the FX Global Code asks of them.

The CFO or CEO is ultimately responsible for FX markups, but handling FX wires is often delegated to a cash manager or administrative officer, and the responsibility can get lost in the organization. Blades International is happy to talk to your bankers directly. Each client's solution is customized, and you may decide it is best for Blades International to stay in the background as a confidential financial advisor.

On the rare occasion a bank will not move, we introduce one that will and manage the transfer of your FX and related services.

In principle, yes. You would need independent rate sources the executing bank does not control, disciplined time stamps, and somebody whose job it is to look every month. Blades International's greatest value is having those independent rate sources, and the experience and technology to use them effectively, along with deep FX experience in advising on written agreements, checking compliance and improving your FX process.

The banks pay us nothing, and we accept nothing from them. The initial review is complimentary: if your banks' spreads are fair for your volumes, we will say so, and there is no charge.

Where we negotiate reduced spreads, our fee is a share of the proved savings during the following calendar year. You pay nothing unless Blades International has achieved a cash saving for your company. After the first year, the Foreign Exchange Rate Integrity® Audit makes sure there is no back-sliding by the bank, for a minimal charge based on the number of transactions.