Citigroup's Global Transaction Services and Foreign Exchange & Local Markets (FXLM) Group today announced the launch of the AutoFX Passive Hedge service, leveraging the key functionality of Citigroup's AutoFX offering to provide institutional asset owners with a completely passive, automated hedging capability to lower foreign exchange (FX) risk.
The service provides new levels of flexibility, transparency and efficiency to the FX marketplace. By using set standing instructions to execute FX contracts based on the securities portfolio valuation, AutoFX Passive Hedge smooths out the influence of currency fluctuations in the overall return to international investment portfolios.
"Our clients will further benefit from this seamlessly integrated custody and FX offering providing a complete STP solution from deal determination and execution through to payment processing and FX confirmations ," said Neeraj Sahai, Citi's Global Head of Securities and Fund Services. "
A key feature of Citi's AutoFX Passive Hedge is its automated "trigger" functionality. Once the hedge parameters have been established, it automatically executes and continuously monitors, and adjusts back to the target hedge ratio based upon pre-set thresholds. This results in reduced currency exposure and reduced costs in managing this exposure.
Anil Prasad, Global Head of Foreign Exchange & Local Markets said, "AutoFX Passive Hedge is a natural product extension for us, built on the robust and integrated model we have developed between SFS and CitiFX over many years. By leveraging our joint expertise in this area, and with the breadth and scope of Citi's global footprint and depth of liquidity, we have the right model to provide a service offering that will significantly benefit our clients."
Other components of Citi's AutoFX product portfolio include AutoFX Execution, AutoFX Settlements, Income and Corporate Actions and Tax Reclaims, and AutoFX Share Class Hedging. Citi AutoFX Passive Hedge is available in over 60 markets with the CitiFX Benchmark rates available in over 50.
Through its Securities and Fund Services business, Citi's industry-focused experts provide investors worldwide with tailored solutions delivered through proven global platforms that feature modular, open architecture. With over $11ver $11 trillion of assets under custody and the industry's largest proprietary network, clients can leverage Citi's local market expertise and global reach to extract value across the entire investment value chain.