FX Exposure Management
Protecting the value of future cash flows & earnings against FX rate volatility
IT2 Foreign Exchange Exposure Management collects and consolidates enterprise-wide FX exposure information and FX hedging transactions and consolidates the data for analysis and action. The solution enables the management of the entire hedge transaction lifecycle, including counterparty limit checking, and the generation of settlements, confirmations and accounting journals.
The powerful earnings protection facilities of IT2 FX Exposure Management secure the value of both the balance sheet and future transactional exposure, by analysing and netting the complete FX exposure for the organisation, and identifying the appropriate hedging operations in accordance with treasury policy.
IT2’s Foreign Exchange Exposure Management solution is available on a standalone basis, or fully integrated with the cash, risk and treasury accounting modules of the IT2 Treasury Management System.
The IT2 FX Exposure Management Solution l Front, middle and back office visibility, analysis and decision support
- Controlled and secure capture of all the organisation’s FX exposures
- Ability to view gross or net exposures by currency, business unit or region
- Unlimited exposure sources, including ERP and GL systems, AP and AR, spreadsheet based exposure reports, forecasting systems and consolidation tools
- Automated and secure process for collection and aggregation of exposures
Position Analysis and Decision Making
- Real time position analysis, with exposures, positions and hedges automatically updated as they evolve, both on screen and in reports
- Comparison of current positions and hedging ratios with policy limits and targets
- Embedded decision support tools to support the effective execution of the FX hedging program
Hedge Execution and Capture
- Hedge execution using direct links with online trading portals plus direct transaction entry
- Import of hedge transactions
- Full support for the capture and management of a wide range of FX hedging transaction types, including spots, forwards, average rate forwards, swaps, options (plain vanilla, barrier and average rate), and NDFs (non-deliverable forwards)
- Pre-trade limit checks, supporting counterparty risk management requirements
- Attachment of supporting documentation
- Automatic creation of settlement instructions, including via the CLS (Continuous Linked Settlement) system to eliminate FX settlement risk
- Secure and controlled workflow management and STP, enhancing efficiency and audit quality
- Confirmation generation and processing
- Compliance with accounting standards
- Generation of treasury accounting journals, for export and reporting
IT2 FX Exposure Management tools deliver transparent exposure and position analysis to treasury, enabling the effective execution and straight through processing of hedging transactions. They facilitate the minimization of earnings volatility measured through the P&L impact of changes in FX market conditions.