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New strategies
Delivery enables the creation of shorter strategies matched to spot market trades.
Reduction of Minimum Term for Forward Contracts
Changes will bring greater flexibility to strategies involving forward contracts
Reduction of minimum term for forward shares, units, BDRs and ETFs contracts
Changes will bring greater flexibility to strategies involving forward contracts
To meet market demand, the purpose of this study is to assess the feasibility of reducing the minimum term for forward contracts from 16 calendar days to 7 business days.
This measure may facilitate the adoption of new short-term strategies with a possible reduction in fees required by lenders for short-term transactions.
Learn more about this study on this page.
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benefits of the product
Fee reduction
Enables smaller fees in short-term transactions.
Flexibility
Greater customization of strategies, both at the buyers end and at the lenders end.
Learn more about the impacts of this study
Reduction of the minimum term may facilitate the emergence of new strategies
Currently, the term of forward shares, units, BDRs and ETFs contracts is established between the parties, with a minimum duration of 16 calendar days and a maximum duration of 999 calendar days.
The contract buyer may opt to request early settlement, provided that certain conditions are met.
However, when requesting early settlement, buyer must pay the previously agreed fee in full without any ratio calculation.
The reduction of the minimum term for forward contracts to 7 business days might allow savings in fees on shorter contracts, thus enhancing the creation of shorter term strategies matched to spot market trades.
Timeline
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03/29/2024
Go-Live
