Contract Settlement

The business of settling the hedge occurs periodically - semi-annually or quarterly- matching a corresponding settlement time of the hedged microfinance loan. When loan payments are received, the settlement on the hedged transaction also occurs. Five days prior to settlement, MFX will send an email to the client indicating the upcoming transaction.

Two days prior to the settlement is the "fixing date". This is the date on which the market indices are set and are relied upon to determine the pricing on the hedge and the attendant payment terms. At the close of the fixing date, MFX will email the client information about the settlement amount for the settlement date two days hence.

Payment may be due to the client from MFX or due from the client to MFX, based on the terms of the hedge and the prevailing market rates. In the event that the MIV has more than one position with MFX, netting of payments applies. Due on receipt of the invoice, payments are settled with wire transfers to either MFX's or the client’s bank as specified in the original contract.