Currency exchange can be a very fast transaction. There is nothing to verify except that two parties own clean funds in their account, can agree on an exchange rate, and are ready to transact.
A common Euro to USD exchange rate is 15 percent gross bonus to the EUR P with a 10 percent net. While certainly not all I have seen a number of these contracts that lists the USD P and the supposed USD mandate being paid commissions within the fee protection area of the contract. The USD mandate is listed on the Euro side which makes no logical sense. It’s actually a supposed mandate that is actually nothing more than a mandate for another broker. There is absolutely no logical legal reason behind a principal being paid as an intermediary/broker.
The only logical two reasons for a USD P being paid as a broker:
A. The USD P does not actually own the USD and is actually another broker within the transaction.
B. The USD P does not know enough about manipulating legal documents to adjust the transaction document to reflect their desired rate of exchange.
If a USD P and mandate continue to expect to get paid as an intermediate/broker …then it is the responsibility of those parties to authenticate their actual relationship to the USD funds. I don’t care how much they have other brokers brain-washed/brain-dead to say that it is just how it is. I don’t need an attorney to hold my hand doing the due diligence and/or altering documents so that all parties maintain their integrity. These currency documents and legal documents in general are not a mystery to me.
A USD P’s mandate expecting to get paid on the EUR side of the transaction is logically insane. That means the “mandate” is direct to nothing more than another broker no matter how loudly they protest. I will say that whoever inventing the common “buyside” “sellside” side for these transactions should have been shot. People waste way too much time worrying about making the most by thinking the least. And as a result …these transactions are rarely closed.
There is a signatory of significant Euros and other currencies in Dubai that are looking for USD. This EUR P signatory expects the USD to move first.
There is a USD signatory in Canada that is looking for Euros. This Canadian USD P expects the EUR to move first. Trances are $10-20 Million per day.
The reason the two providers above are not transacting with each other is because each expects the other to move their funds first. I understand the legitimate concerns of both parties. While I can only drag horses mouths to water …I have crafted the procedures below that are designed to accelerate win-win for both parties.
A. BOTH PARTIES AGREE ON A COMMON BANK TO MANAGE THE EXCHANGE.
B. BOTH PARTIES DIRECTLY SIGN, SEAL AND RETURN THIS BUSINESS AGREEMENT TO EACH OTHER, ALONG WITH THE FEE PROTECTION AGREEMENT WHICH IS AN INTEGRAL PART OF THE BUSINESS AGREEMENT, BY E-MAIL (HARD COPIES ARE TO BE SENT BY COURIER SERVICE IF REQUIRED).
C. THE COMMON BANK ENDORSES THIS AGREEMENT CONFIRMING THEIR PARTICIPATION WITHIN THE EXCHANGE, WITH FULL BANKING RESPONSIBILITY, ON BEHALF OF BOTH PARTIES.
D. BOTH PARTIES COMMENCE COMPLETION OF DEPOSITS AT THE COMMON BANK.
E. THE COMMON BANK, WITH FULL BANKING RESPONSIBILITY, SIMPLY EXCHANGES THE CURRENCIES IN EACH OF THE PARTIES’ ACCOUNTS ACCORDING TO AGREED EXCHANGE RATE AND TRANCHING SCHEDULE.
F. COMMISSIONSARE PAID SIMULTANEOUSLY WITH THE EACH EXCHANGE IN ACCORDANCE WITH THE PAYMENT INSTRUCTIONS OF THE BENEFICIARIES OF BOTH PARTIES AS PER FEE PROTECTION AGREEMENT EMBEDDED WITHIN THE TRANSACTION AGREEMENT.
G. SUBSEQUENT TRANCHES FOLLOW AS AGREED.
I can only drag horses’ mouths to water but I can’t make them drink it.
Any parties focused on looking for proof of funds (POF) from the other party needs to equally be ready to show their ownership/relationship to their funds. It’s absolutely a two-way street.