TREASURY

Wellastone Brokers & Treasury provides upstream and downstream treasury solutions for Global companies, provides complete Global & foreign exchange risk management services across all Global services.

Foreign exchange

The most commonly traded foreign exchange contract would be spot purchases to sell or buy one currency in exchange for another. The market normally has a 2day value date to remit foreign currency and related cost include Exchange & Forex commissions which can be quite extensive, with Wellastone once mandated our function is to reduce your administration, reduce costs, improve GP margin, Global mitigation, currency management of your Forex exposure supported by innovative solutions to optimize cash reserves, utilize alternatives to securitization and encourage business globalization under the ambits of Reserve Bank governance or trade block agreements:

  • Forex spread is reduced;
  • Exchange Com (OTT / ITT) is reduced;
  • Electronic automation versus manual entries;
  • Audit trail and real time trading;
  • Mark to marketing landscape reports;

HEDGING & DERIVATIVES

Forward exchange contracts (FEC)

(FECs) is a simplistic fixed contract you acquire with a cost upfront that mitigates movement of currency differentials versus payment under Purchase Orders (PO) obligations and has the following benefits:

  • Provides your company the ability to fix your currency purchases 6 months forward to mitigate forex volatile movement and emulates into a fixed GP margin;
  • With EXCON approval we can extend this to 12 months forward based on CCC;
  • It is not provide options to exercise a Forex gain or loss and is commonly utilized by financiers;
  • Majority of authorized dealers purchase 10% notional forex risk exposure and require cash cover, we have alternative ways or securitizing to optimise cash reserves;

DERIVATIVES

Based on the natural of your risk appetite and companies strategy (weather you would prefer risk or non-risk participation instruments) we conduct a risk assessment to determine alignment or a hybrid of any of the following but not limited to (min value per derivative $100k):

  • Options & swaps
  • Liquid Fuel Hedging;
  • Futures (e.g. Maze (Safex) or Rand futures)
  • Cost collars etc.

EXCHANGE CONTROL

Africa has prescriptive legislations that are regulated through Reserve Banks, legislation is often ambiguous and decisions are administered by authorized dealers within prudential mandate discretions. This leads to desired outcomes not always been achieved or delays in Finance or foreign movement executive due to specialist that do not possess all related credit, industry, legislated and financial disciplines. As Wellastone we have a wealth of knowledge and experience is providing and facilitating Excon dispensations to condone and ensure your company is not hampered by the inability to comprehend legislative requirements and how and when to apply accordingly.

  • e.g. Multinational Companies often are effected by 3(1)(e)(f) whereby local financial assistance is limited to their NAV;
  • Foreign Direct Investment (FDI) versus share allotment;
  • Foreign loans and restriction on IRR;

INSTRUMENT MANAGEMENT & OUTSOURCING

The natural of Letters of Credits have been underutilised due to the nature or delayed or lack of quality of advice through traditional Global specialist, Wellastone will ensure we set up, establish and manage these instruments which can be challenging to ensure they offer 100% protections for Goods or services received or rendered, these would include but not limited to:

  1. Documentary Letters of Credit (LC) (Various permutations)
  2. Transferable LC;
  3. Stand by LC (SBLC)
  4. Foreign Bid bond;
  5. Foreign Warranty & performance guarantees;
  6. Foreign Bills of Collection (FBC’s)
  7. Negotiation cost and confirmation charges;
  8. Freight Forwarder undertakings;

CURRENCY INVOICING

Part of comprehension of legislation of understanding how to leverage off a stressed economy by holding hard stronger currencies and reporting under GAAP / IFRS standards supported by document reduction where possible in lien of reducing cost, admin and maximizing forex gains (non-speculative) these would include but not limited to:

  • Foreign Currency Invoicing;
  • IDDP; etc.

GLOBAL BUSINESS TRAINING

We as Wellastone encourage the upskilling and support skills based learning we offer numerous training interventions at the client’s premises to prevent business interruption. With shorter periods and frequent sessions supported by practice simulations our short terms courses are valued:

  • Documentary letter of credit;
  • Foreign Bills of Collection (FBC);
  • Incoterms;
  • Life cycle of a business;
  • Forex dealing;
  • Hedging;
  • Logistics, warehousing & collateral management;
  • Structured Trade and Commodity Finance, etc.

Private individuals (FOREIGN INVESTMENTS)

According to the Global Wealth Index (GWI), South Africans have lost 29.1% of their wealth annually compounded over the last 30 years. The ZAR lost 34% of its value against the USD in 2015 alone due to sudden political changes supported by Foreign market investor reactions. These type of statistics have got South Africans concerned. Many are looking to protect their wealth against further Rand weakness. If you’ve been exploring your options for moving your wealth abroad, give us a call. We’ll guide you through the complexities of exchange control regulations, market volatility and assist with the opening of international Bank accounts.

  • We facilitate and advise private investors who would like to transfer funds to invest in foreign assets:
    • Investment allowance as prescribed by SARB per/a is R10mio
      • Tax clearance certificate would be required;
    • Discretionary allowance as prescribed by SARB R1mio per/a
      • These would encumber travel and study allowances

ESCROW ACCOUNT MANAGEMENT

Third Party Payment Providers (TPPPs)

WH are Third Party Payment Providers (TPPP). There are two types of TPPP viz. Beneficiary Service Provider (BSP) and Payer Service Provider (PSP). A PSP or BSP, in terms of SARB Directive 1 of 2007, accepts money or the proceeds of payment instructions from two or more payers for on-payment to third persons to whom the money is due (Section 7 of the NPS Act refers).

A TPPP is typically enabled by a SO, and may hold funds for payment due in its own bank account for a limited period of time. A SO only provides the technology but does not accept the funds into its own bank account for on-payment to another party.

All TPPP’s have to be registered by a clearing participant. A list of registered TPPPs is publically available on the PASA authorisations website. Wellastone acts as a paymaster under these regulation and the following solutions are available herein:

 

Salient features and Benefits

  1. The Escrow tripartite agreement forms a guarantee to both the depositor and Supplier respectively;
  2. Wellastone is also party to the transaction and acts as a paymaster (TPPP) to insure no misappropriation of funds and the Tripartite agreement serves as a guarantee and provides comfit to all parties herein; (Swift messaged may be generated to beneficiaries for the Escrow holder to indicate their financial readiness)
  3. A account manage will be allocated to the account to administer pre-agreed conditions president on each call, whereby a copy will be provided to both parties;
  4. Statements will be provided to parties by the account manager and instructions will  not be deviated from once agreed;
  5. Once funds are deposited they are utilised in accordance with the instructions pre-agreed to remit payments to the creditors listed and milestones agreed under each drawdown instruction;
  6. The structured guarantee does not require credit consent and will be swiftly executed upon agreement of all parties;
  7. These structures are international Trade instruments and highly regulated under Banking law supported by International Chamber of Commerce (ICC);

FICA Requirements

  1. Both parties mandated signatories full name, id number and contact details;
  2. Both parties physical and legal addresses;
  3. Both parties Banking details for surplus funds or credit interest if any; (IBAN / SWIFT number where possible)
  4. copies of both parties proof of address and shareholders id’s / passports;