How do I extend a forward contract?

Details

Before you request an extension on a forward exchange contract (FEC), please ensure you have the following:

• Authority to manage contracts: You must be an authorised signatory or have the appropriate permissions on your OFX profile to request changes to forward contracts.

• Contract details: Have your forward contract reference number and relevant account information ready.

• Timing: You must contact OFX before the original settlement (maturity) date of your contract.

A forward exchange contract allows you to lock in an exchange rate for a future currency transfer, helping you manage foreign exchange risk and protect your cash flow. If your business circumstances change and you need to extend the contract’s maturity date, you can request a contract extension (also known as a rollover).

Please note:

• Extending a forward contract may result in a cost or a benefit. This is because the exchange rate is adjusted to reflect the interest rate difference between the two currencies for the additional time period.

• Extensions are subject to OFX approval and may not be available in all cases.

Please note: Forward contracts can only be extended to a maximum of 365 days from the original booking date, regardless of how many times the contract has been rolled. Requests beyond this limit cannot be approved.

Why is this important

Extending a forward contract provides flexibility if your payment timelines shift. Understanding how to request an extension with OFX helps you avoid unnecessary costs, maintain compliance, and continue managing your foreign exchange risk effectively.

Next Steps

1. Contact OFX Support

   • Call the OFX support team on before your contract’s maturity date.

   • Inform the team that you wish to extend your forward contract.

2. Review of Terms

   • OFX will review your request, considering your trading history, credit profile, and current market conditions.

   • A revised forward rate will be applied to reflect the interest rate difference between the two currencies for the extended settlement period.

   • Agree to New Terms

   • If you accept the new rate and terms, the original contract will be closed out and replaced with a new one reflecting the extended settlement date.

3. Confirmation

   • OFX will confirm the rollover and provide updated documentation if required.

   • You will receive a confirmation message and any relevant contract documents.

4. Follow-up Actions

   • Update your internal records and forecasts to reflect the new contract terms.

   • If you are part of a partnership or multi-entity business, ensure all stakeholders agree to the extension and update shared documentation or approvals as needed.

   • Accountants should ensure the extension is reflected in financial records, as the revised rate and settlement date may affect hedging strategies and reporting obligations.

If you need further assistance, please contact the OFX support team.