Forward members. Forward contract in the financial world

forward contract- a certain agreement concluded between two parties about the forthcoming delivery underlying asset.

The existing terms of the contract are negotiated at the time of its conclusion. A forward contract is executed on the basis of these conditions and on time.

What are the features of a forward contract?

The conclusion of a forward contract does not provide for any costs, with the exception of those commissions that will be spent on processing the transaction, if it is carried out with the help of an intermediary.

Is forward contract, usually for the purpose of buying or selling a required asset, in addition to insuring a supplier or some buyer against a potentially unwanted price change. Counterparties, on the other hand, are insured against undesirable developments, not being able to take advantage of a potentially favorable market situation.

The terms of the forward contract stipulate the obligation to perform, but despite this, the counterparties are still not 100% insured against its non-performance. For example, due to the bad faith of any of the participants in the transaction or the bankruptcy of the company. Therefore, before concluding a deal, you need to make sure that both parties are solvent and reputable.

Also, a forward contract can be concluded, in which the goal is to play on the difference in the value of the asset rate. A buying analyst expects the price of the underlying asset to rise, and a selling analyst expects the asset price to fall.

For its primary purpose, a forward contract is considered an individual type of contract. For this reason, other markets for forward contracts for a large share of assets are poorly developed or not developed at all. An exception here may be forward.

When signing a forward contract, both parties agree on the price of the transaction. This price is called the delivery price, after which it remains constant throughout the duration of this forward contract.

With the advent of the forward contract, the concept of a certain forward price appeared. Relative to each time interval, the forward price, for the current underlying asset, is the delivery price noted in the contract signed to date.

Legal features and types of forward contracts

Let us examine in more detail the legal features of forward contracts. As we have already said, the forward type of contract involves the real delivery of any product as the final result. Since the object of the forward is the real product, that is, the things that are available. With all this, the reference to the validity of the goods should in no way infringe on the right of the seller to conclude a contract for the sale of goods that will be manufactured or purchased by the person selling the goods in the future.

A forward contract is enforced some time later, after its direct conclusion.

A forward is a justified opportunity to insure profits.

Before concluding such an agreement, its important conditions are stipulated, namely:

terms
total quantity of goods
its price, which is not completed before a specific delivery date.

This type of risk insurance is called hedging in the market. base price goods in all forward transactions is different from its price in cash transactions. In addition, it can be set both at the time of signing the contract, and during the calculation and delivery.

The execution cost of a forward transaction (which is determined for the period of its implementation) is some average exchange price indicator for this product.

The forward price is the result of the participants' assessment of all possible factors influencing the market, and all further prospects for the development of related events on it.

Price ratio in forward contracts

In the process of development of the foreign exchange market, forward contracts began to be divided according to the method of delivery into the following types:

delivery type of forward contracts;
further, settlement forward contracts, in other words, non-deliverable types of forward contracts.

As for delivery contracts, the delivery under them is calculated initially, and mutual settlement is made by paying one of the parties the resulting difference in the cost of the goods or a previously established amount, based on the terms of the contract.

When working with settlement types of contracts, the delivery of goods (ie the underlying asset) is not provided from the beginning of the transaction. Such contracts allow the losing party to pay a set amount of money, the difference between the price itself, stipulated in the contract and the current market price on a specific date.

The calculation for this amount (also called the variation margin) is made at a previously appointed time, as a rule, in relation to the delivery of the basis.

Determining the forward price

Based on the theory, in the process of determining the forward price, 2 concepts are usually distinguished:

The first is that the forward price arises as a result of the upcoming expectations of all participants in the futures exchange, in relation to the upcoming spot price.

The second type of concept is based on the arbitrage method. According to the provisions of the primary concept, all participants in economic relations are trying to take into account and consider all the information that they have in relation to the upcoming conjuncture and set the price of the future spot.

An arbitrage approach is built on the basis of technical mutual agreement between the current spot and forward prices, which is set without any possible risk.

The arbitrage approach is based on the following provision: on the basis of a financial decision, the investor is obliged to be indifferent in the matter of obtaining the underlying asset in the spot market now or under a forward contract in the future.

During the life of the forward contract, income on shares will either be paid or not.

If during the term of the contract a profit accrues per share, then it is necessary to change the forward price by its value, because by signing the contract, the investor will not receive his dividends. Moreover, there is a definition of the forward price of the currency itself, based on interest rate parity, which consists in the fact that the depositor is obliged to receive equal income from the placement of funds at a certain percentage without significant risk in foreign, and necessarily.

Forward contract and mutual obligations

The parties enter into various agreements among themselves, under which mutual obligations must be fulfilled at a specified time. When a contract is concluded "in advance", that is, its object will have to be delivered in the future, such an agreement is called a "forward".

What can forward contracts look like, what are their nuances and possible risk how the "forward" transaction proceeds, you will learn from this article.

What is a forward contract

The word "forward" (eng. "Forward") in translation means "forward." The name characterizes the main feature of forward contracts - the terms of the transaction acceptable to both parties are fixed even before it is concluded.

Forward or forward contract is a contract or agreement, concluded without the participation of the exchange, regarding the delivery of a specified amount of an asset by a certain date under the conditions specified at the time of the conclusion of the contract.

The meaning of such an agreement is that the conditions originally indicated in it cannot be changed by either party and are guaranteed to be fulfilled on the stipulated date.

NOTE! Formally, the asset being sold is not limited to securities, but in practice, with the help of forward contracts, currency is most often sold, and the parties are credit institutions, traders, trading and production organizations. Also, oil is often sold in this way.

A forward contract is entered into when it is assumed that the value of an asset may change over time, that is, a commodity may depreciate or rise sharply in price. An upfront deal reduces the risk of adverse effects from such dynamics.

Features of a forward agreement

The defining features of a forward contract and its differences from other types of similar agreements:

a forward is concluded outside the exchange, in contrast to a similar agreement - a futures contract;
the term of the forward contract can be any agreed upon by the parties;
there is no strict standard for forward transactions, unlike futures;
forward contracts are not required to report;
the forward cannot be broken or altered by either side;
have a free form regarding the expression of the will of clients;
forward is not retroactive;
the parties do not bear the cost of concluding a forward contract.

The main disadvantage such agreements is insufficient insurance of partners. Despite the fact that the deal is declared “solid”, in the event of a change in market conditions, the profit may exceed the penalties and the desire to maintain a good reputation. In such situations, the failure of the partner to fulfill the obligations assumed is not ruled out.

IMPORTANT! When concluding forward agreements, it is recommended that a particularly thorough due diligence check of counterparties is recommended.

Main components of a forward

Forward contracts have the following basic characteristics.

Subject of contract- realizable asset. It can be either a real commodity or a financial instrument (for example, an interest rate).
Asset Quantity to be delivered. It should be indicated in units convenient for the client.
Asset delivery date fixed and not subject to change. It is desirable to determine the time of delivery of the asset.
Delivery price (execution)- the amount that the buyer of the asset pays to the seller (fixed in the terms of the contract, cannot be changed).
forward price- the same delivery price, but not fixed, but determined at a specific time moment.
Forward agreement price is the difference between the forward price and the delivery price. It may need to be calculated if the forward contract is subject to resale in the secondary market. In such conditions, the forward price at the time of resale of the contract is taken as the first indicator.

NOTE! The forward price can be called the delivery price of a contract concluded at a given time moment.

Example showing the difference between the delivery price and the forward price

Forward contract 1 for the supply of Alfa shares to Beta on 10 September 2017 was entered into on 1 June 2017. Price condition - 120 rubles. per share. On this day, the delivery price is the same as the forward price. July 1 shares are quoted at 130 rubles. The delivery price remained the same (it does not change), the forward price became 130 rubles. On that day, Alpha entered into a forward contract 2 for the sale of another batch of shares on the same date. In contract 2, the delivery price will already be 130 rubles, since it has changed on the market. On September 10, 2017, Alfa shares are quoted at 110 rubles. This will be the forward price. But the Beta company will have to pay the delivery price - under contract 1 it will be 120 rubles. per share, and under contract 2 - 130 rubles. per share.

Forward side positions

Depending on whether claims or obligations prevail for a particular party, the appropriate forward contract item can be selected:

short position seller means a greater amount of the underlying asset sold than purchased (obligations exceed requirements);
long position buyer - the amount purchased exceeds the amount sold (requirements exceed obligations).

Party holding short position, suggests that market price the asset will go down, so you need to urgently sell it before it falls critically low. Such a policy is called a short game.

And the side with a long position expects prices to rise, so it prefers to buy with hope for the future (buying).

Types of forwards

There are three types of forward agreements:

delivery- that is, the underlying asset specified in the contract must actually be delivered and transferred from the seller to the buyer;
settlement- the asset is not actually transferred, and on the specified date the offset and compensation of the difference between its market value and fixed in the agreement;
currency- the parties exchange currency, the exchange rate of which remains unchanged.

According to the type of underlying asset, forwards can be divided into 2 groups.

Commodity forwards- means a tangible item of sale, such as:
- energetic resources;
- metals;
- products Agriculture etc.
Financial forwards- the underlying asset is a financial instrument:
- currency;
- interest rates;
- stock;
- other securities and stock values.

If we take into account the parties to the contracts, we can distinguish:

forwards between banking organizations or between a bank and a client;
forwards between trading and manufacturing enterprises.

Commodity forward example

A trader studies the market situation precious metals and assumes that the price of platinum, which at the date of his research is about 1,600 rubles per gram, will rise. He enters into a forward contract to buy platinum at a price of 1,700 rubles per gram for a period of 3 months. After the specified time, the quotation of platinum is 1900 rubles per gram. The trader will buy platinum at the price of 1,700 rubles fixed in the contract, immediately sell it for 1,900 rubles and will have net profit 200 rubles per gram of precious metal.

Financial Forward Example

The client wants to sell 10,000 euros to the bank, but not now, but in six months. He enters into a foreign exchange forward agreement with a banking organization. At the time of the conclusion of the contract, the euro exchange rate was 63 rubles. According to the rules of the contract, it is necessary to make a deposit in the agreed amount that suits the parties, let it be 20%. The client deposits banking organization 2,000 euros at the indicated exchange rate. After 6 months, due to changes in the political situation, the euro exchange rate is 70 rubles. The client deposits the remaining amount - 8,000 euros, and the bank pays him the money in rubles at the increased rate.

Forward hedging

Hedging is a mechanism for reducing contract risks. It provides for opening financial transactions, which will be able to compensate for losses if the market turns unfavorable. The purpose of hedging is to minimize possible losses due to market fluctuations.

For example, when currency trading it is not always possible to guess whether the growth or fall rate. Let's assume that the profit under the contract will be in the event of an increase. In this case, it will consist in concluding in parallel with this such a contract, which will give a gain in case of depreciation. Naturally, the profit in this case will be less, but the possible loss is also less.

In practice economic activity It is customary to hedge the following types of risks:

currency, resulting from fluctuations in exchange rates;
percentage, the reason for which lies in the change in quotes valuable papers;
commodity, associated with price dynamics, inflation, and other economic factors.

IMPORTANT! Key Principle hedging - reducing risks, but not the ability to take advantage of the situation in order to obtain additional profit.

Forward hedging example. The entrepreneur plans to buy imported goods abroad in the next quarter. To complete this transaction, he will need currency. But it is not known what the rate will be in a few months, and the businessman decides to hedge with a forward. He enters into a forward agreement with the bank to purchase currency at the current rate. Now he is insured against losses in the event of an increase in the quotes of currencies, but will not be able to make a profit if the price of the currency decreases.

ATTENTION! A forward contract is only one way to hedge. Futures, options, swaps and other financial instruments are also used to manage risks.

Investing with a forward contract

You can invest money without buying and selling the assets themselves, but doing it only with liabilities. A forward contract is a very convenient vehicle for such investments.

Since the forward terms are not standardized, they can be chosen in such a way that they will completely repeat the conditions for the sale of the underlying asset itself, for example, shares. When the contract is signed, the shares cost a certain amount. The trader then sells the contract, receiving for it the value of the shares at the time of sale. Thus, the contract acted as a derivative instrument, allowing to reduce the investment costs that are inevitable on the stock exchange.

The nuances of the domestic forward

In foreign practice, forward transactions are much more common than in the Russian Federation. Many economists do not recognize the level of such contracts as higher than in a bet or gambling. Nevertheless, the forward is increasingly taking its place in Russian economic practice.

The legislative framework for forward contracts was laid down about 20 years ago in the following regulations:

instructions of the Bank of the Russian Federation dated May 22, 1996 No. 41 “On setting limits on the open foreign exchange position and monitoring their observance by authorized banks Russian Federation» – for making forward transactions between banks or between a bank and a client;
Regulation of the Bank of the Russian Federation dated March 21, 1997 No. 55 “On the procedure for maintaining accounting purchase and sale transactions foreign exchange, precious metals and securities in credit institutions" - defines a forward transaction as an agreement, the obligations under which are carried out with a delay of at least 3 days after the conclusion;
Decree of the Government of the Russian Federation dated July 10, 2001 No. 910 “On the Program for the Social and Economic Development of the Russian Federation for medium term(2002 - 2004)" - allowed to recognize transactions with deferred execution as a bet.

Forward risks specific to the Russian Federation

Equating forward transactions with games and betting, experts insist on their predominantly risky nature - the impossibility of completely calculating the result and great influence on them random events. The meaning of this equating is in the absence judicial protection such transactions, because a bet is a voluntary matter, unlike contracts, where non-fulfillment of obligations provides for certain sanctions.

Decree Constitutional Court The Russian Federation of December 16, 2002 No. 282-O pointed out the unlawfulness of classifying forward transactions as a bet and refusing legal protection regarding them, since the risk in games and betting and with a forward has a different nature.

Gaming risk is created by the excitement of the players themselves, while in forward risk it is of an entrepreneurial nature and is associated with the peculiarities of the market, without bearing the features of specific participants.
Unlike the goal of the game and the bet - to enjoy the process, getting the benefit if possible, the main goal of the transaction, like any entrepreneurial activity- Making a profit, reducing risks as much as possible.

Latest legislative changes state: if at least one of the parties to a forward transaction is legal entity licensed for banking or market activities, then forward transactions with him will be protected in court.

NOTE! Forward transactions are very common abroad and are protected by law, but in our country this market segment needs further improvement and development.

A forward contract is an agreement between parties on the future delivery of an underlying asset. All terms of the transaction are negotiated at the time of conclusion of the contract. The execution of the contract takes place in accordance with these conditions at the appointed time.

The conclusion of the contract does not require any expenses from the counterparties (we do not take into account here the possible commissions associated with the execution of the transaction, if it is concluded with the help of an intermediary).

A forward contract is usually entered into for the purpose of actually selling or buying the relevant asset and insuring the supplier or buyer against possible adverse price changes. Counterparties are insured against unfavorable developments, but they also cannot take advantage of a possible favorable market situation.

Despite the fact that the forward contract assumes mandatory performance, counterparties are not insured against its non-performance due to, for example, bankruptcy or dishonesty of one of the participants in the transaction. Therefore, before concluding a deal, partners should find out the solvency and reputation of each other.

A forward contract may be concluded for the purpose of playing on the difference in the market value of assets. face opening long position, counts on the rise in the price of the underlying asset, and the person opening a short position - on the fall of its price.

According to its characteristics, a forward contract is an individual contract. That's why secondary market forward contracts for most of the assets is not developed or is poorly developed. The exception is the forward foreign exchange market.

When concluding a forward contract, the parties agree on the price at which the transaction will be executed. This price is called the delivery price. It remains unchanged for the duration of the forward contract.

In connection with a forward contract, the concept of a forward price also arises. For each point in time, the forward price for that underlying asset is the delivery price fixed in the forward contract that has been entered into to that point in time.

Legal nature and types of forward contracts

Let us dwell in more detail on the legal characteristics of forward transactions. As already noted, a forward transaction usually involves the actual delivery of goods as a result. " The subject of forward exchange transactions is the real product, i.e. items available". At the same time, the reference to the reality of the goods should not limit the seller's right to conclude an agreement on the sale of goods that will be created or acquired by the seller in the future in accordance with paragraph 2 of Art. 455 of the Civil Code of the Russian Federation.

The execution of a forward transaction occurs through certain period after its conclusion. The main purpose of such a delay in the fulfillment of obligations for delivery and settlements under a forward transaction is “insurance against changes in exchange rates, the cost of goods, etc. At the same time, a secondary goal may also be obtaining speculative profits.

Forward is an excellent means of profit insurance. At the time of the conclusion of this transaction, the essential terms of the contract are fixed - such as the term, quantity of goods, its price - but delivery is not made before a certain date. Such risk insurance is called, as noted above, hedging. The value of a commodity in forward transactions differs from its value in cash transactions. It can be determined both at the time of the conclusion of the contract, and at the time of settlement or delivery. The execution price for a forward transaction (determined at the time of its execution) is, as a rule, the average exchange value of the commodity price. The forward value is the result of an assessment by participants in exchange trading of all factors affecting the market and the prospects for the development of events on it.

In the process of formation financial market there was a division of forward transactions on the principle of delivery into deliverable forward contracts (delivery forwards) and settlement forward contracts (non-deliverable forwards). For delivery forwards, delivery is assumed initially, and mutual settlements are made by payment by one party to the other party of the resulting difference in the price of the goods or a predetermined sum of money depending on the terms of the contract.

In transactions with settlement forward contracts, the delivery of goods (underlying asset) does not occur and is not initially provided. Such a transaction provides for the payment by the losing party of a certain sum of money of the difference between the price stipulated by the contract and the price actually prevailing on the market on a certain date. The calculation of this amount (variation margin) occurs on a predetermined date, usually in relation to the exchange price of the delivery basis.

Determining the forward price

From the point of view of theory, two concepts can be distinguished in the issue of determining the forward price. The first is that the forward price arises as a consequence of participants' future expectations. derivatives market relative to the future spot price. The second concept is based on the arbitrage approach.

In accordance with the provisions of the first concept, participants economic relations they try to take into account and analyze all the information available to them regarding the future conjuncture and determine the future spot price. The arbitrage approach is based on the technical relationship between the forward and current spot prices, which is determined by the existing risk-free rate in the market. It is based on the position that the investor, from the point of view of a financial decision, should be indifferent to the issue of acquiring the underlying asset in the spot market now or under a forward contract in the future. During the life of a forward contract, dividends on a share may or may not be paid. If a dividend is paid per share during the life of the forward contract, then the forward price must be adjusted by its value, since by purchasing the contract, the investor will not receive a dividend. In addition, there is the concept of the forward price of a currency based on the so-called interest rate parity, the meaning of which is that the investor must receive the same income from placing funds at interest without risk in both national and foreign currencies. Both options should bring the investor the same result. Otherwise, there will be an opportunity to make an arbitrage operation.

REPO transactions

REPO and reverse REPO operations

At present, widespread repurchase agreements, referred to as "repurchase agreements". Their essence lies in the fact that an economic entity (usually a credit institution) acquires some property and at the same time, usually in the same contract, undertakes to sell the same property to the seller under the first contract. Formally, such a transaction consists of two sale and purchase agreements, differing from each other only in price (in the buyback agreement it is higher than the price of the first agreement), as well as the terms for the transfer of property and monetary compensation.

In fact, in such a transaction, the payment of the purchase price under the first contract is equivalent to the issuance of a loan, the difference between the price of the first and the price of the second contract is the use fee bank loan, and the time interval between the terms of payment for the goods under the first and second contracts - the credit period. The property, acting as the subject of the contract of sale, performs the function of securing the repayment of the loan, similar to that performed by the pledge. The agreement, as a rule, establishes that in case of non-payment of the purchase price (that is, in fact, the failure to return the “loan” on time), the bank may terminate the agreement and dispose of the property at its own discretion.

REPO is a short-term transaction, from one-day (overnight) to a period of several weeks. With a repo, a dealer can finance its position to purchase securities.

There is a concept " reverse REPO". This is an agreement to buy securities with the obligation to sell them at a later date at a lower price. In this transaction, the person who buys the paper at a higher price actually receives it as a loan secured by money. The second person providing a loan in the form of securities receives income (interest on the loan) in the amount of the difference in the sale and redemption prices of securities.

Now let us dwell in more detail on the legal characteristics of this type of transactions. According to clause “d” part 2 of the instruction of the Central Bank of the Russian Federation “On establishing an open currency position and monitoring their observance by authorized banks of the Russian Federation” dated May 22, 1996 No. 41, as already noted, “a REPO transaction is a transaction for the sale ( purchase) of securities with the obligation of subsequent repurchase (sale) after a certain period at a predetermined price. A REPO transaction consists of a cash and term parts: direct and reverse purchase and sale transactions.

The Central Bank proposed the following definition of a REPO transaction: it is “an agreement on the purchase/sale of securities with subsequent mandatory sale/purchase at a price determined at the time of purchase/sale.

Some forms of pledge, known to the history of law, as well as the theory and practice of foreign legal systems, involve the transfer to the pledgee of ownership of the subject of pledge. However, the desire of law enforcers to circumvent the requirements of the law on the impossibility of transferring the right of ownership to the pledgee to the pledgee gives rise to phenomena that hardly fit into the framework of the usual legal regulation and entailing difficulties in their legal qualifications. In other words, the struggle for the "purity of theory" collides with the needs of civil circulation.

There are also so-called "direct REPOs" and repos of the "sale and repurchase" type ("purchase and repurchase"). In contrast to repos of the "sale and repurchase" type, "direct repos" are made by the parties only if there is a general agreement between them on the implementation of repo transactions. Such an agreement clearly defines the rights, responsibilities of the parties and the procedure for settlements between them under transactions. In a "direct" REPO, the interest income on the transaction is clearly highlighted. "Direct" repos cover both transactions with the delivery of securities and transactions without the delivery of securities, Commonly referred to as repos "with its depository".

The legal regulation of this institution of the financial market is rather fragmented and fragmented. Yes, accommodation government bonds through the conclusion of REPO transactions is regulated by the Temporary Procedure for Conducting REPO Transactions with Bank of Russia Bonds, approved by Directive of the Central Bank of the Russian Federation of October 5, 1998 No. 374-u.

REPO transactions - provide business entities with loans to their counterparties, subject to the receipt of highly liquid collateral. Such operations, which have received worldwide recognition as a mobile financial instrument, were used in order, firstly, to circumvent the restrictions associated with the special legal personality of credit institutions, and, secondly, not to use the cumbersome and inefficient collateral system adopted in Russian law. According to L.G. Efimova, a REPO transaction is a type of a sale and purchase agreement and “combines not only the actual sale and purchase, but also a preliminary agreement on the sale of securities ... through certain time at a predetermined price."

It should be noted that a reverse REPO transaction cannot be unequivocally interpreted as preliminary contract. The contract for the sale of securities is not real, but consensual, for the conclusion of which one consent is sufficient. However, if the subject of the contract cannot be transferred at the time of the transaction, then nothing prevents the conclusion of a regular contract of sale, contract, paid services, etc., indicating in it a certain point in time in the future as the deadline. Considering that the essential terms of a sale and purchase agreement and a REPO transaction are known, as a rule, at the time of concluding an agreement, the conclusion of a repurchase and sale in the form of a preliminary or main agreement depends on the will of the parties themselves, formulated in the subject of the agreement. The very same transaction for the repurchase and sale of shares may well be considered forward.

Currently, when considering disputes arising from repurchase transactions, the courts usually qualify them as sham transactions that cover up collateral. The arguments of opponents of such transactions were formulated in a number of resolutions of the Supreme Arbitration Court of the Russian Federation: No. 6202/97, 7045/97 and 1171/98 of October 6, 1998.

At the same time, it is obvious that a REPO transaction is not a way to secure obligations, such as, for example, a pledge. A REPO transaction has an independent legal nature, and each of its parts (both cash and urgent) can be standard contract purchase and sale. However, as a rule, in such transactions, the will of the parties is not aimed at obtaining the equivalent of the sold property, but, as noted above, the difference between the price of the original and reverse sales contracts. Any of these agreements, out of connection with the other, is of no value to the subjects. Securities sold under a cash contract and bought under a fixed-term contract play the role of securing the obligations of the parties or, other than money, the cost equivalent of the subject of obligations. A similar explanation of the need for REPO transactions is given in economic literature. So, I.T. Balabanov notes that "these transactions essentially represent a pledge of securities when obtaining a loan from a bank at a certain percentage," and the transactions themselves "represent single contracts."

At the same time, M. Maslennikov notes that “repo-type agreements are not aimed at covering loan and pledge agreements. They are concluded for a completely different purpose, namely, for the purpose of playing on fluctuations in the stock price. It should be taken into account that REPO transactions are widely used in interbank activities, in foreign exchange and stock markets. This is explained by the fact that, being essentially speculative, they perform two very important functions: they attract additional financial resources to the market and reduce the risks of exchange trading participants. In addition, REPO agreements are provided for in a number of acts of the Government and/of the Central Bank of Russia.” A similar formulation by M. Maslennikov about the “speculative” nature of such transactions seems to be quite familiar in the field of qualifying forward settlement contracts, which the courts in a number of cases refused to provide judicial protection precisely on the basis of the speculative nature of this transaction. References in by-laws to a particular transaction, as noted, do not affect the position of the courts on this issue.

Let us dwell in more detail on the relationship between REPO transactions and pledge agreements and, as a result, define more clearly the criteria that allow qualifying this species transactions as sham.

Correlation between REPO transactions and collateral as a way to ensure the fulfillment of an obligation

Formally, a REPO transaction is a set of two sale and purchase agreements. However, if we analyze its essence based not only on the literal interpretation of the text of the agreement, but also on the goals and essence of the actions that were pursued and committed by the parties, then it should be recognized that the purpose of the transaction is not the sale of property, but the temporary provision financial resources“under the assignment of the right of ownership of the property” or “on the pledge” of the property.

As already noted, from the standpoint judicial practice such transactions are unacceptable. So, initially the plenums of the Armed Forces of the Russian Federation and the Supreme Arbitration Court of the Russian Federation in par. 2 paragraph 46 of the well-known resolution dated 01.07.96 No. 6/8 “On some issues related to the application of part one of the Civil Code of the Russian Federation” categorically indicated that the current legislation “does not provide for the possibility of transferring property that is the subject of pledge to the property of the pledgee.” Any agreements providing for such a transfer are void, with the exception of those that can be qualified as a release or novation of an obligation secured by a pledge (Articles 409, 414 of the Civil Code of the Russian Federation). Subsequently, by resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of October 6, 1998 No. 6202/97 (as well as subsequent ones - No. 7045/97 and 1171/98), it was established that when concluding a share purchase and sale agreement (REPO transaction) as security loan agreement, the parties had in mind a pledge, and not a transfer of shares to each other's ownership on the basis of sales contracts, and therefore, the share sales contract is void due to sham under Art. 170 of the Civil Code of the Russian Federation.

It is quite obvious that arbitration courts proceed from the erroneous premise that any transaction outward signs similar to a pledge, and that is what it is. This does not take into account the principle of freedom of contract (Article 421 of the Civil Code of the Russian Federation). Thus, the general rule “everything that is not expressly forbidden is allowed” is violated. In addition, the court, in our opinion, applied the analogy of the law here - which, by virtue of Art. 6 of the Civil Code of the Russian Federation is allowed only if the relations are not clearly regulated by the parties to the contract and there is no business custom applicable to these relations. It seems that with respect to REPO transactions it is quite acceptable to talk about the existence of a custom of business turnover, given, firstly, that such transactions are widely used in practice, and secondly, that the rules for them are provided for in acts Central Bank of the Russian Federation (Order No. 02-469 dated October 24, 1997 “On Approval of the Instructions “On the Procedure for Compiling and Submitting Reports by Credit Institutions in central bank of the Russian Federation”; Instruction of the Central Bank of the Russian Federation dated September 17, 1999 No. 639-U “On Amendments and Additions to the Regulation “On Servicing and Circulation of Issues of Government Short-Term Zero-Coupon Bonds””; Regulation of the Central Bank of the Russian Federation “On the Procedure for Concluding and Executing REPO Transactions with government securities of the Russian Federation” dated March 25, 2003 No. 220-P).

In addition, Art. 329 of the Civil Code of the Russian Federation establishes that the fulfillment of obligations can be ensured in other ways, statutory or an agreement, in addition to those listed in the said Art. (pledge, guarantee, etc.). It seems that the REPO transaction is an independent method of ensuring the fulfillment of obligations, not named in the Civil Code of the Russian Federation.

Even if we consider that the purpose credit institution is not the acquisition of ownership of such "purchased" property, then the application to the REPO transaction of clause 2 of Art. 170 of the Civil Code of the Russian Federation is highly controversial. The fact is that the parties did not have in mind the conclusion of a pledge agreement, because if they wanted to apply the rules on pledge (not entailing the transfer of ownership of the pledged property to the pledgee), then they would have concluded a pledge agreement. Here, the will of the parties was aimed specifically at establishing a special method of securing an obligation not named in the Civil Code of the Russian Federation and regulated by an agreement between the parties and business customs.

Indeed, this method of security is similar to a pledge with the transfer of the pledged property to the pledgee. However, the only criterion that would allow qualifying a “securing” REPO as hidden collateral is the subject of the transaction. In both cases, the subject of the transaction is the property of the borrower, other than cash. In all other respects, these transactions have significant differences.

G.V. Melnichuk points out the following on this issue: “The REPO transaction in itself is not a way to secure obligations, such as, for example, a pledge. A REPO transaction has an independent legal nature, and each part of it (both cash and urgent) can be a standard sale and purchase agreement. However, as a rule, in such transactions, the will of the parties is not aimed at obtaining the equivalent of the sold property, but at the difference between the price of the original and reverse sales contracts. Any of these agreements, out of connection with the other, is of no value to the subjects. Securities sold under a cash contract and bought under a fixed-term contract play the role of securing the obligations of the parties or, other than money, the cost equivalent of the subject of obligations.

It is interesting that arbitration and judicial practice does not deny the existence of a loan-collateral agreement, which is in many respects close to REPO agreements. Under the terms of such an agreement, the lender transfers funds to the borrower, the latter searches for the seller and, by proxy from the lender, concludes a contract of sale. According to the purchase and sale agreements concluded by the borrower, the lender pays for the purchased goods from his current account: that is, the property becomes the property of the lender precisely as the subject of such a kind of “pledge”.

It should be noted that the scope of REPO transactions is not limited to credit relations, but is widely used in the securities market, since most often it is securities that act as property used in a REPO transaction. This is explained, according to A. Arkhipov and A. Kucherov, primarily by the fact that the sale of securities is exempt from VAT taxation (subclause 12, clause 2, article 149 and subclause 10, clause 1, article 150 tax code Russian Federation). Of significant importance is also the exceptional simplicity of the transaction in the case of bearer securities, as well as the relatively high liquidity of securities. However, the three-day period for registering a pledge under the conditions of trading shares on the stock exchange, set in clause 10.3 of the FCSM Resolution No. 27 of October 2, 1997, is unacceptably long. To solve this problem, participants in exchange trading use various legal mechanisms to secure the obligations of the borrower to the lender, which in essence are a pledge, but do not require registration inherent in the pledge.

A classic example of such collateral is the commission by a broker, on the basis of clients' orders, of securities purchase and sale transactions, the settlement of which is carried out by the broker using cash or securities presented to the client by the broker with a delay in their return (the so-called margin lending).

By virtue of Resolution No. 6 of the Federal Securities Commission of the Russian Federation of March 23, 2001, which regulates the procedure for making such transactions, such transactions are carried out on the basis of an agreement between the client and the broker, according to which the client assumes the obligation not to dispose of belonging to him and recorded on the client’s depo account (section depo accounts) securities to the extent sufficient to fulfill obligations to the broker and for the period until settlements with the broker based on the results of transactions. The broker is granted the right to sell the securities recorded on the client's depo account in an amount sufficient to make settlements with the client for his obligations to the broker that arose as a result of transactions, and to dispose of the client's funds in order to purchase securities in an amount sufficient to make settlements on the obligations of the client to the broker for the supply of securities arising as a result of transactions.

Thus, relations between the broker and the client are reminiscent of a pledge of book-entry securities, with the collateral being left with the pledger, but they are not. At the same time, it is not required to register a pledge with the registrar (depository), which significantly saves time, and in addition, the lender gets the opportunity to foreclose on the subject of loan security (by implementing it without the consent of the client).

The above security mechanism has certain drawbacks: transactions can only be carried out through trade organizers (that is, such transactions in the securities market that are not traded on the stock exchange are impossible); only securities established by a separate resolution of the Federal Securities Commission of the Russian Federation can act as a subject of security; the amount of the loan that the broker can provide to the client in this mode is limited; additional obligations arise for the broker-lender (in particular, for opening a separate credit line).

Such shortcomings significantly narrow the scope of such a pseudo-collateral mechanism for securing the rights of the lender. But since this scheme is normative act, the possibility of contesting such transactions in judicial order minimum.

There is another way to secure the client's obligations to the broker for borrowed assets - this is the issuance of a loan by the broker to the client secured by the client's securities (cash) by concluding REPO transactions. When implementing such a scheme, all the above problems of margin lending disappear: transactions can be made for any amount, with any securities, they can be concluded on an unorganized securities market, etc.

In addition, unlike the classic use of REPO transactions to secure obligations on loans received in monetary form, which takes place in banking, the purpose of concluding such transactions in the securities market can be both to receive money and to receive securities (when implementing the so-called short technology: the client borrows securities from a broker, sells them, waits until the value of these securities decreases, then buys them at a lower price and returns them to the broker, keeping the difference).

In this regard, the position of the Supreme Arbitration Court of the Russian Federation, reflected in the decision of the Presidium of the Supreme Arbitration Court of the Russian Federation dated October 6, 1998 No. 6202/97, again seems disputable. Based on the logic of this decision, the REPO transaction and the related brokerage agreement concluded by the broker with the client should be understood as a hidden pledge agreement, which is unacceptable because:

the sale of securities received under such a REPO agreement can and should be qualified as the commission by a broker, on the basis of an instruction from clients, of securities purchase and sale transactions, the settlement of which is carried out by the broker using cash or securities provided to the client by the broker with a delay in their return in violation of the FCSM resolution Russian Federation No. 6 dated March 23, 2001, and this is fraught with liability for the broker up to the loss of a license;
If we qualify such REPO transactions as a hidden loan agreement, then it turns out that the subject of pledge under such an agreement is cash, and this directly contradicts the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of July 2, 1996 No. 7965/95, which states that cash is not may be the subject of pledge due to the impossibility of their implementation.

Summing up the above, it is worth noting that the “cautious” attitude of law enforcement agencies (and primarily the courts) to REPO transactions can be explained by the desire to bring the behavior of economic entities under the direct effect of certain legislative norms at all costs.

State bodies are afraid to allow wide civil turnover legal institutions that do not have sufficient regulation. Therefore, banks and participants in the securities market are forced to carry out such operations on their own responsibility, which creates additional risks in their business activities. And this situation requires at least an adjustment of judicial practice.

forward transaction(Forward Operation, FWD) - an urgent currency exchange transaction according to a pre-agreed agreement, which is concluded today, however, the value date (contract execution) is postponed for a certain period in the future.

The market for foreign exchange forward transactions has been an integral part of the global market since the early 1980s. For the first time, London banks began to use forward transactions in interbank transactions with eurocurrencies. In August 1985, the Association of British Bankers (BBA) issued the rules for regulating transactions in the interbank foreign exchange market (FRABBA terms), which are still guided by banks when concluding forward transactions.

The basis of a forward transaction is a contract for the sale and purchase of foreign currency within certain period or at a certain date in the future at the exchange rate agreed on the date of the transaction. Forward transactions are futures contracts of the interbank foreign exchange market. The terms of forward transactions are standardized and, as a rule, do not exceed 12 months. The most common are forward transactions for 1, 2, 3, 6, 9 and 12 months. In practice, these periods are reflected as 1M, 2M, 3M, etc.

Recently, forward transactions are widely used for non-trading operations related to the movement of capital: lending foreign affiliates, investment, acquisition of securities of foreign issuers, repatriation of profits and the like.

A forward transaction is binding and is concluded primarily for the purpose of actually buying or selling currency. The most common use of such trades is to hedge unsecured open bonds, however, they can often be used for speculative purposes.

The terms of forward transactions are that:

the exchange rate is fixed at the time of the forward transaction;
the real transfer of currency is carried out after a certain agreed standard period of time;
when signing the agreement, no advance payments are made;
contract volumes are not standardized.

The financial content of a forward transaction is the purchase or sale of one currency in exchange for another, based on the interests of the buyer (seller), in order to make a profit or prevent losses.

The specifics of a forward transaction is that forward exchange rates, unlike other types of transactions, are not directly fixed, but calculated. and professional operate with indicators expressed as a ten-thousandth part exchange rate, reflecting the difference between the spot rate and the forward rate. These indicators are called forward margin (, points, pips) and in practice, quotations are made not for rates, but for the corresponding differences.

The forward exchange rate is calculated at the time of the forward transaction and consists of the current rate (spot rate) and the forward margin, which can be in the form or discount (). If the forward exchange rate is higher than the current one, a forward premium is added to the spot rate to determine it. If the forward rate is lower than the current one, it is determined by subtracting the forward discount (discount) from the spot rate.

In practice, in order to distinguish between a premium or a discount, they are often written with a plus or minus sign, respectively, but the dealer will always accurately determine the premium or discount if the sign is not indicated. This is because the buyer's rate is always lower than the seller's rate. Therefore, if the forward margin indicators (spread) are given in increasing order, for example, 150 - 200 or [(-100) - (-20)], then we are talking about the forward premium. If the spread is given in descending order, for example, 220 - 100 or [(-50) - (-180)], then the dealer takes this spread into account as a forward discount (discount).

Forward rates differ from spot rates by a much larger absolute value of the indicator (the difference between the selling and buying rates). This is due to the specifics of a forward transaction, which is also a form of insurance. currency risks. The longer the forward period, the higher the level will be, and, consequently, the larger the forward margin.

The main factor that forms the dynamics and level of the forward rate is the difference in interest rates on interbank loans and deposits in the respective currencies. General rule forward exchange rate dynamics: the forward rate exceeds the spot rate to the extent that bank deposit rates for the quoted currency are lower than for counterparty currencies.

A currency with a higher interest rate in the forward market will sell at a discount to a currency with a low interest rate, while a currency with a lower interest rate will sell at a premium against a currency with a high interest rate.

Thus, the forward rate differs from the current rate by the amount of the forward margin (premium or discount). In professional terminology, the term "outright" (outright) is used to determine the forward rate. This means that the buyer wants to buy a certain amount of currency in the future (or the seller wants to sell it) without any additional transactions or conclusion additional agreements. This term is used to avoid confusion in understanding the conditions forward operation, if we are talking about one simple forward transaction, as opposed to a complex combination associated with the simultaneous implementation of urgent and current operations(operation "swap").

In practice, information on forward rates of major currencies is regularly published in financial publications.

Recently, new forms and modifications of classical forward transactions have appeared, in particular:

extension of the term of the forward transaction;
use of forward options with an open expiration date;
using forward options and with cross dates;
use of foreign currency accounts;
conclusion of indirect forward transactions;
providing foreign exchange coverage;
independent creation of a "forward";
use of forward contracts with a cancellation option (FOX);
use of forward agreements interest rate and etc.

(forward, English forward contract) is an agreement to exchange a certain amount of one currency for any other currency in the future at a price fixed at the time of the agreement. According to the contract, the seller undertakes, within the period specified in the document, to transfer the asset to the buyer or to perform an alternative monetary obligation. In turn, the buyer undertakes to accept the asset, pay for it in the manner and within the time period specified in the contract.

The forward can be delivered or settlement:

DF - delivery, ends with the delivery of the asset and full payment on the terms of the contract. Deliverable forwards include an urgent OTC transaction (with deferred obligations);
NDF - settlement (non-deliverable) does not end with the delivery of the asset.

Also, there is a forward with an open date - this is a contract with an indefinite settlement date (execution date).

At the time a forward contract is entered into, a price is set, which is current price for the respective asset. All settlements between the parties occur exclusively at this price. When determining it, the partners proceed from the fact that at the end of the period the investor should receive the same financial results by purchasing an asset or a forward contract for its delivery. If the forward price is lower (higher) than the spot price of the asset, then the arbitrageur buys (sells) the contract and sells (buys) the asset.

The subject of the agreement is various assets - stocks, commodities, currencies, bonds, etc. As a rule, a forward contract is concluded for the purpose of real purchase or sale of the relevant asset, as well as to insure the buyer or supplier against possible adverse price changes. In addition, FC can be concluded for playing on the difference in asset rates.

The price at which the contract will be executed is called the delivery price. It is unchanged during the entire period of the FC. When concluding a deal, the party that opened a long position expects a further increase in the price of the asset. When it increases, the buyer of the forward contract wins, respectively, the seller loses. Winnings and losses on FC are realized after the expiration of the contract, when there is a movement of assets and cash.

It should be noted that the conclusion of a forward contract does not require significant expenses from counterparties, with the exception of possible commission fees associated with the execution of a transaction when it is completed using the services of intermediaries. Despite the fact that FC assumes mandatory performance, counterparties are still not immune from unscrupulous partners who sometimes do not fulfill their obligations. Therefore, before concluding a deal, partners must find out the integrity and solvency of each other.

FC is concluded in unorganized markets outside the exchanges and is not standard in its content. It is believed that as a result of this, the secondary market is absent or very narrow, because. it is rather difficult to find a third party whose interests are fully consistent with the terms of the forward contract, originally concluded according to the needs of the first two parties.

Disadvantages of a forward contract

Firstly, this is the lack of guarantees for the execution of the financial statements in the event that one of the parties develops an appropriate conjuncture. Secondly, it is low liquidity.