Product Disclosure Statement
United States & Canada (January 2014)
Global Payment and Risk Management Solutions Product Disclosure Statement - United States & Canada January 2014
Contents
Introduction ...... 3
Products ...... 3
Trade Confirmations ...... 8
Telephone Recordings ...... 8
Complaints ...... 8
Privacy Statement ...... 14
Fraud Protection ...... 15
Compliance ...... 16
Taxation ...... 17
Contact Us ...... 18
Glossary ...... 19
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Introduction
This Product Disclosure Statement (PDS) contains About AFEX information about the Global Payment and Risk Associated Foreign Exchange, Inc . (AFEX), a California Management Solutions provided to you by AFEX . Corporation located at Warner Center, 21045 Califa Street, Woodland Hills, California 91367 United States, is The information set out in this PDS is general in nature licensed and regulated as a Money Transmitter by several and has been prepared without taking into account your State Regulatory Agencies, and it is registered as a Money objectives, financial situation or needs . Before dealing Services Business (MSB) with the Financial Crimes in foreign exchange transactions you should consider Enforcement Network (FinCEN), a bureau of the United whether it is appropriate, having regard to your own States Department of the Treasury Financial . In addition, objectives, financial situation and needs . This PDS does AFEX is also registered with the Financial Transactions and not constitute financial or legal advice, including financial Reports Analysis Centre of Canada (FINTRAC) . recommendations . If you need legal advice, please seek the services of an Established in 1979, AFEX effectively pioneered the attorney . business of personalized foreign exchange services, tailored to small and mid-size business clients . AFEX is If you have any questions or need more information, please wholly owned by Associated Foreign Exchange Holdings, contact your AFEX Account Executive or visit our website at Inc . a California Corporation, with subsidiaries in multiple www .afex com. . jurisdictions, including the United States, United Kingdom, Australia, Switzerland, etc . Trading in foreign exchange and foreign exchange derivative products involves the potential for gain as well as the risk of loss . In some cases, that loss may exceed the amount of Products money you commit to a transaction . Movements in the price of foreign exchange rates are influenced by a variety of Foreign Exchange Transactions factors many of which are unpredictable . AFEX is unable to In general terms foreign exchange is the conversion of one guarantee a maximum loss that you may suffer from trading . currency to another at an agreed exchange rate . A foreign You are not obliged to use any products described in this exchange transaction is a binding agreement between you PDS unless you have a comprehensive understanding how and AFEX in which one currency is sold or bought against they work, including the risks and the costs involved . another currency at an agreed exchange rate on the current date or at a specified future date . The day that you order Changes to this PDS your currency is referred to as the Trade Date; the day that Information in this PDS that is not materially adverse to you are required to make payment for your currency (and users of our products is subject to change and may be the day that we exchange currencies) is referred to as the updated via our company website (see our contact details Value Date . AFEX offers the following three types of foreign on the cover page of this PDS) . You can access that exchange transactions: information by visiting the website, or otherwise contacting us and asking for an electronic or paper copy, which will be • Value Today – refers to transactions where the Value provided free of charge . You can also access the website Date and the Trade Date are the same day . which may contain, from time to time, other information • Value Tomorrow – refers to transactions where the Value about our products . We may make other information about Date is one business day after the Trade Date . our products available to you, and that information may also • Value Spot – refers to transactions where the Value Date be accessed for free from our website or by contacting us is two (2) business days after the Trade Date . by phone or email . In addition to these transactions we also offer a foreign exchange product that is settled beyond two business days . This is referred to as Forward Exchange Contracts .
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How does a Foreign Exchange Transaction work? • The currency pair When you enter into a foreign exchange transaction you • Market volatility and liquidity at the time of the transaction nominate the amount of currency to be bought or sold, • Availability of currency in the market . the two currencies to be exchanged and the type of trade • The tenor (or value date) of the currency exchange . (Value Today, Value Tomorrow or Value Spot) . The currencies • Interest rate differentials between the two that you wish to exchange must be on the list of available currencies involved . currencies provided by AFEX . The exchange rate that AFEX provides you for Value Today AFEX will determine the exchange rate applicable to the and Value Tomorrow transactions are based on the standard trade based on the currencies and the Value Date that you market convention of reflecting the interest rate differential have nominated . On the Value Date it is essential that you between the currencies that are being exchanged . This deliver the currency you are exchanging in accordance with adjustment can be either an addition or subtraction and the exchange rate determined by us and agreed by you at reflects the costs or benefits associated with the interest the time the trade was entered into . rate differential between the currencies that are being exchanged . Upon receipt AFEX will pay you or your nominated beneficiary the amount of currency that you have purchased . Exotic Currency Spot Value Contracts If you intend to purchase an Exotic Currency (and you will be How is the foreign exchange rate determined? informed at the time of booking by your Account Executive A foreign exchange rate is the price of one currency (the whether the currency you are buying is an Exotic Currency), Base Currency) in terms of another currency (the Terms you are merely permitted to book for delivery on the Spot Currency) . A quotation shows how many units of the Terms Value Date and need to make payment for this purchase Currency will equal one unit of the Base Currency . For on or before 1pm Pacific Time of the Trade Date . Failure to example the foreign exchange rate AUD/USD 0 .7215 do so may result in the Exotic Currency you had purchased means one Australian dollar is equal to 72 .15 US cents . In being sold back and the resulting loss (if any) being charged this example, the Australian dollar is the Base Currency and to you . the US Dollar is the Terms Currency . The client is required to provide correct and complete bank Exchange rates are quoted on the interbank market and instructions prior to the trade . The trade may take place only fluctuate according to supply and demand . This market is upon approval of the bank instructions by AFEX . restricted to authorized exchange dealers and banks that constantly quote to each other at wholesale rates and in By entering into an Exotic Currency Spot Value Contract, minimum parcel sizes . you have removed the uncertainty of exchange rate movements over the next two Business Days . In exchange Factors that influence supply and demand include: for this exchange rate certainty you have relinquished the opportunity to take advantage of any favorable exchange • Investment inflows/outflows rate movements between the Trade Date and the Spot Value • Market sentiment or expectations Date . • Economic and political influences • Import/export of goods and services In addition to this Exotic Currencies are illiquid, i .e . they have low trading volumes and therefore market movements in Exchange rates quoted in the media generally refer to these environments can be amplified and unpredictable . This interbank rates and will usually differ from exchange rates increased level of risk represents a high cost to carry for quoted to you . Interbank rates do not reflect the levels at trading entities and complicates the unwinding of existing which AFEX buys or sells currency . Rates of exchange currency positions . obtained by AFEX and in turn offered to its customers are dependent upon the following factors: The differences between the bid and ask prices for exotic currencies tend to be significantly wider compared to the
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major currencies . This combination of illiquidity and a lack beneficiary bank(s) which facilitates the sending or payment of inherent price stability have an adverse effect on exotic of a wire transfer/drafts may impose their own additional currency pricing . In turn, this heightens volatility, which fees or charges which may be deducted from the amount poses a significant risk to any trading entity . Market volatility paid to you or your beneficiary . These fees are at the can be higher by a margin of several hundred percent, discretion of those institutions and AFEX does not control, depending on socio-economic and political conditions or the set or benefit from such fees . prevalent investment climate in the respective jurisdiction . If a transaction has to be sold back to the currency market, the For further information in relation to the cost of wire probability for substantial losses is significantly increased . transfers and drafts in connection with a foreign exchange transaction, please contact your Account Executive at AFEX . Settlement and delivery of a Foreign Exchange Transaction On the value date for your trade it is vital to deliver the currency that you are exchanging in accordance with the Forward Contracts exchange rate determined by AFEX and agreed by you at the time the trade was entered into . Upon receipt of cleared A forward Contract is a binding agreement between you funds AFEX will pay you or your nominated beneficiary the and AFEX in which one currency is sold or bought against amount of currency that you have purchased . another currency at an agreed exchange rate on an agreed date beyond two (2) business days in the future . AFEX AFEX can deliver payment to you or your nominated offers the following three types of Forward Contracts: beneficiary either by initiating a wire transfer to a bank account or through the physical delivery of a draft in Window Forward Contracts accordance with your instructions to AFEX . Window Forward Contracts exchange one currency for another at a specified and agreed Foreign Exchange Rate Cost of a Foreign Exchange Transaction for a Value Date between three Business Days and one year When you enter into a foreign exchange transaction, you after the Trade Date and allow you to access your foreign agree to make a payment of one currency to AFEX in currency at any time within the Window Period . exchange for the receipt of another currency . The amount that you pay to us is determined by the exchange rate that The exchange rates quoted for Value Dates different from we agree . the Spot Value Contract are determined by adjusting the Spot Exchange Rate by Forward Points . You will not be charged any additional entry fees for a foreign exchange transaction but other fees or charges may By entering into a Window Forward Contract you have apply for related services such as wire transfers or drafts removed the uncertainty of exchange rate movements that are made in connection with the foreign exchange until the settlement of the contract . In results to this transaction . exchange rate certainty you relinquish the opportunity to take advantage of any favorable exchange rate movements The transaction fee we charge you for these services will between the Trade Date and the Value Date . In addition, with vary based on: a Window Forward Contract, you may utilize any portion of the currency purchased at any time up to the Value Date of • AFEX fixed costs for fulfilling the transaction . the contract, once that currency has been paid for . • Volume and frequency of wire and / or draft payments . • The relevant currency involved Outright Forward Contracts • The country to which the funds are being sent Outright Forward Contracts exchange one currency for another at a specified and agreed Foreign Exchange Rate Your Account Executive will advise you of any transaction for a Value Date between three Business Days and one year fees before you begin trading . In addition to the fees after the Trade Date and have a fixed future date as the charged by AFEX for sending payments by wire transfer Value Date . or for issuing drafts, any correspondent, intermediary or
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The exchange rates quoted for settlement dates different the currencies (the Value Date) . The currencies that you from the spot value contract are determined by adjusting the wish to exchange must be on the list of available currencies Spot Exchange Rate by Forward Points . provided by AFEX . For a list of available currencies please contact your Account Executive at AFEX . By entering into an Outright Forward Contract you have removed the uncertainty of exchange rate movements over AFEX will determine the exchange rate applicable to the the next Business Days . In exchange for this exchange rate forward contract based on the currencies and the Value certainty you have lost the opportunity to take advantage of Date that you have nominated . any favorable exchange rate movements between the Trade Date and the Value Date . With the exception of a Non-Deliverable Forward (NDF) on the Value Date it is essential that you deliver the currency Exotic Currency Forward Contracts you are exchanging in accordance with the exchange rate If you intend to purchase an Exotic Currency for a value date determined by AFEX and agreed by you at the time the later than the Spot Value Date (and you will be informed forward contract was entered into . Upon receipt AFEX the time of booking by your Account Executive whether the will pay you or your nominated beneficiary the amount of currency you are buying is an Exotic Currency), you will be currency that you have purchased or sold . entering into an Exotic Currency Forward Contract . Purpose of Forward Contracts The client is required to provide correct and complete bank Forward contracts allow parties to fix exchange rates . This instructions prior to the trade . The trade may take place only allows you to Hedge your currency exposure by providing upon approval of the bank instructions by AFEX . Following protection against unfavorable currency movements approval the trade will take the form of an Outright Forward between the time that you enter into a forward contract and Contract . the Value Date . It may also assist you in managing your cash flow by negating the uncertainty associated with exchange In addition to the risks and benefits of the applicable type of rate fluctuations for the certainty of a specified cash flow . Forward Contract, Exotic Currencies are illiquid, i .e . they have low trading volumes and therefore market movements in Benefits of Forward Contracts these environments can be amplified and unpredictable . This Forward contracts may help you manage the risk inherent increased level of risk represents a high cost to carry for in currency markets by predetermining the rate and date on trading entities and complicates the unwinding of existing which you will purchase or sell a given amount of foreign currency positions . currency against another currency . This can provide you with protection against negative foreign exchange movements The differences between the bid and ask prices for exotic between the time that you deal and the Value Date . This currencies tend to be significantly wider com- pared to the may also assist you in managing your cash flow by negating major currencies . This combination of illiquidity and a lack the uncertainty associated with exchange rate fluctuations of inherent price stability has an adverse effect on exotic for the certainty of a specified cash flow . currency pricing . In turn, this heightens volatility, which poses a significant risk to any trading entity . Market volatility In addition, Value Dates and amounts can be tailored to can be higher by a margin of several hundred percent, meet your requirements . depending on socio-economic and political conditions or the prevalent investment climate in the respective jurisdiction . If Risks Associated to Forward Contracts a transaction has to be sold back to the currency market, the AFEX considers that forward contracts are only suitable probability for substantial losses is significantly increased . for Clients who understand and accept the risks involved in investing in financial products involving foreign exchange How does a Forward Contract work? rates . AFEX recommends that you obtain independent When you enter into an a forward contract you nominate the financial and legal advice before entering into a forward amount of currency to be bought or sold, the two currencies contract . The following are the significant risks associated to be exchanged and the date that you wish to exchange with a forward contract:
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• Forward contracts may not be cancelled by the Client Dodd-Frank Client Notification once entered into with AFEX in accordance with the Under Title VII of the Dodd-Frank Wall Street Reform product’s terms and conditions . and Consumer Protection Act (“Dodd-Frank”), wide- • Any margin amounts associated to forward contracts are ranging measures were introduced designed to introduce non-refundable . transparency and accountability to the financial markets . • The foreign currency market is volatile . If the purchased Some of these regulations include foreign exchange currency weakens during the period covered by the products, such as Forwards . forward contract, the value of the amount of currency may be less favorable than the current price for the purchased Regulatory obligation requires all financial institutions to currency . collect and maintain certain Client information, in order to • Forward contracts purchased from AFEX are not provide continued access to forward contracts Clients may transactions subjects of the Commodities Futures Trading entered into with AFEX . Under the new regulations, all Commission . Clients are responsible for obtaining a Legal Entity Identifier (LEI), currently known in the United States as a CFTC Additional Requirements Interim Compliant Identifier (CICI) . Each forward contract which you enter into will be subject to the Terms and Conditions for doing business with AFEX . It is A CICI is a unique code associated with a single legal entity only after signing these documents that the client is eligible in accordance with the ISO 17442 standard . The CICI is to enter into a forward contract for the first time . a reference data tool to standardize how a counterparty is identified on financial transactions . Its goal is to help In addition to the Master Forward Contract Agreement, improve the measuring and monitoring of systemic risk and you may also need to provide us with the following signed support more cost-effective compliance with regulatory documentation together with such other “Know your reporting requirements . Customer” information that AFEX may require: AFEX’s CICI is: 549300MV57LPASV8US90. • Margin Call Agreement • Legal Entity Identifier Information Request form The registration website to obtain this number is https:// • Bank reference form www .ciciutility .org/ . The following is a link that details the • Audited financial statements purpose behind the LEI/CICI, as required by the regulation (no more than 12 months old) http://www .dtcc .com/products/dataservices/lei .php . • Direct Debit Request form • A Partial Prepayment at the time the forward contract is Significant Benefits of Our Products booked In addition to the benefits already outlined in this PDS, the significant benefits of using our products are: Upon completion of these documents, AFEX will conduct an accreditation process . Accreditation and acceptance of a • Manage Volatility client is at AFEX’s sole discretion . The main checks that are We can offer products that manage the risk that the relevant to the accreditation of a client are: Foreign Exchange Rate will move in an adverse direction . • Verification of a Client’s identity in accordance with • Provide Cash Flow Certainty relevant AML laws . Depending on the products chosen, Foreign Exchange • A successful credit check conducted through a third party Transactions generally allow you to agree to a rate of credit agency . exchange now, for a time in the future . This will help • An AML risk assessment considering relevant factors you to determine the exact cost of that currency, giving such as the nature of a Client’s business and the country certainty over the flow of funds . where the Client will make or receive payments . • Tailored and Flexible • A check of a client’s principal officers and beneficial We can tailor the transaction to meet your specific owners against relevant government issued sanction lists . circumstances . Unlike exchange traded products, our over-the-counter contracts are not standardized and
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can be personally tailored to suit your requirements . For you should inform your Account Executive at AFEX . example, AFEX allows you to enter into transactions in AFEX, however, will not enter into any transaction over the small amounts and the Value Date is negotiable, whereas telephone unless the conversation is recorded . exchange traded products are a standard size and cannot be varied in duration . • Virtual 24 Hour Trading Complaints We offer an on-line platform that helps you trade simply and easily, 24 hours a day . At AFEX, we do everything we can to ensure that our • High Level of Liquidity customers and clients are provided with the highest quality The foreign exchange market is very liquid enabling of services . However, we also recognize that this may not AFEX to efficiently manage its risks by entering into always be the case . When these issues arise, we always transactions with its hedging counterparties . The liquidity encourage you to let us know so that we can address it comes mainly from large and smaller banks that provide accordingly . liquidity to investors, companies, institutions and other currency market players . If you are not satisfied with any aspect of our services, you • Real time quotes can tell us about your concerns or make a complaint by AFEX uses sophisticated technology and/or liquidity contacting your Account Executive at AFEX, or contact us at providers (counterparties) in order to offer you up-to-the- the following address: minute quotes . Associated Foreign Exchange, Inc . Compliance Department Trade Confirmations 21045 Califa Street Woodland Hills, CA 91367 The commercial terms of a particular foreign exchange transaction will be agreed and binding at the time of dealing . You may also send us an email to: complaints .us@afex .com . This may occur verbally over the phone, electronically or in any other manner set out in our Terms and Conditions for Our aim is to resolve your complaint as soon as possible . doing business with AFEX . If the final decision made to your particular complaint is not satisfactory, you may refer your complaint to the below Shortly after entering into a foreign exchange transaction, applicable State Regulatory Agency . Details of our internal AFEX will send you a Trade Confirmation outlining the complaints handling procedures are available on request . commercial terms of the deal; this Confirmation is intended to reflect the transaction that you have entered into with • Alabama AFEX . It is important that you check the Confirmation Alabama Securities Commission to make sure that it accurately records the terms of the 401 Adams Avenue, Suite 280 transaction . In the event that there is a discrepancy between Montgomery, AL 36104 your understanding of the foreign exchange transaction and Website: www .bank state. .al .us the Confirmation, it is important that you immediately raise Telephone Number: (800) 392-5658 this with your Account Executive as a matter of urgency .
• Alaska Department of Commerce, Community and Economic Telephone Recordings Development; Division of Banking and Securities; Money Service Businesses; 550 W . 7th Avenue, Suite 1940; Conversations with our Account Executives are recorded Anchorage, AK 99501 in accordance with standard market practice . We do this to ensure that we have complete records of the details of all Telephone: (907) 269-4594 transactions . Taped conversations are retained for a limited Fax: (907) 269-1066 time and are usually used when there is a dispute and for E-mail: moneytransmitters@alaska gov. . staff monitoring purposes . If you do not wish to be recorded
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• Arizona If you want a refund, you must mail or deliver your written Arizona Office of Financial Institutions request to Associated Foreign Exchange, Inc . at 21045 2910 North 44th St ., Suite 310 Califa Street, Woodland Hills, California 91367 . If you Phoenix, AZ 85018 do not receive your refund, you may be entitled to your money back plus a penalty of up to $1,000 and attorney’s Website: www .azdfi .gov fees pursuant to Section 2102 of the California Financial Telephone Number: (800) 352-8431 Code ”.
• Arkansas • Colorado Arkansas Securities Department Entities other than FDIC insured financial institutions 201 E . Markham, Suite 300 that conduct money transmission activities in Colorado, Little Rock, AR 72201-1692 including the sale of money orders, transfer of funds, and Website: www .securities .arkansas .gov other instruments for the payment of money or credit Telephone Number: (800) 482-8982 are required to be licensed by the Colorado Division of Banking pursuant to the Money Transmitters Act, Title • California 12, Article 52, Colorado Revised Statutes . If there are If you have any complaints with respect to any aspect questions or concerns regarding a transaction with a of the money transmission activities conducted through licensee, please contact the Colorado Division of Banking AFEX, you may contact the California Department of at (303) 894-7575 or by mail at: Colorado Division of Business Oversight at its toll-free telephone numbers, Banking, 1560 Broadway, Suite 975, Denver, CO 80202 . (800) 662-0620, by e-mail at consumer .complaints@ dbo .ca .gov or by mail at Department of Business Consumer complaints should be in writing, providing as Oversight, Consumer Services, 1515 K Street, Suite 200, much detail as possible . Please include the following Sacramento, CA 95814 information:
California Department of Business Oversight - The name of the institution and the name of any 45 Fremont Street, Suite 1700 person(s) at the institution with whom the complainant San Francisco, CA 94105-2219 has had contact . Include telephone number(s) and Website: www .dfi .ca .gov addresses . Telephone Number: 1-800-952-5210 - A complete description of the complaint and any efforts that have been made to resolve the complaint RIGHT TO REFUND: “You, the customer, are entitled directly with the institution . to a refund of the money to be transmitted as the result - Copies of any available documentation supporting the of this agreement if Associated Foreign Exchange, Inc . complaint and efforts toward resolution . “AFEX” does not forward the money received from you - Any suggestions regarding a preferred resolution of within 10 days of the date of its receipt, or does not give the complaint . instructions committing an equivalent amount of money to the person designated by you within 10 days of the date • Connecticut of the receipt of the funds from you unless otherwise Connecticut Department of Banking instructed by you . 260 Constitution Plaza Hartford, CT 06103-1800 If your instructions as to when the moneys shall be forwarded or transmitted are not complied with and the Website: www .state .ct .us/dob money has not yet been forwarded or transmitted you Telephone Number: (860) 713-6100 have a right to a refund of your money .
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• Delaware • Illinois Delaware Office of State Bank Commissioner Illinois Department of Financial and Professional 555 East Loockerman St ., Suite 210 Regulation Dover, DE 19901 Division of Financial Institutions 320 W . Washington Website: www .banking .delaware .gov Springfield, IL 62786 Telephone Number: (800) 220-5424 Website: www .idfpr .com • District of Columbia Telephone Number: (800) 243-0618 Department of Banking & Financial Institutions 810 1st Street, NE Suite 701 Services are provided by Associated Foreign Exchange, Washington, DC 20002 Inc . dba Associated Foreign Exchange of Illinois, Inc . (“AFEX”), located at 21045 Califa Street, Woodland Hills, Website: www .disb .dc .gov California 91367, at (888) 428-2339 . Upon receiving Telephone Number: (202) 442-9828 good funds from you, our client, Associated Foreign Exchange of Illinois, Inc . will make payment available • Florida to you or your beneficiary, as indicated on the trade Associated Foreign Exchange, Inc . (“AFEX”) is a licensed confirmation, and commit to forwarding equivalent funds money transmitter under Chapter 560, Florida Statutes . according to given instructions within a period not to For suspected violations of Chapter 560, Florida exceed ten (10) business days . If your instructions as to Statutes, call Associated Foreign Exchange, Inc . at (888) when the monies shall be forwarded or transmitted are 428-2339 or contact the Florida Office of Financial not complied with, you will have a right to a refund of the Regulation, 200 East Gaines Street, Tallahassee, FL money, subject to applicable exchange rates at the time 32399-0376, (800) 848-3792 . of the refund request . To request a refund in such cases, please call or write AFEX at the number or address listed • Georgia above . Georgia Department of Banking and Finance 2990 Brandywine Road, Suite 200 • Indiana Atlanta, GA 30341 Indiana Department of Financial Institutions Website: http://dbf .georgia .gov Non-Depository Division Telephone Number: (404) 651-8600 30 S . Meridian Street, Suite 300 Indianapolis, IN 46204 • Hawaii Website: www .in .gov/dfi Hawaii Division of Financial Institutions Telephone Number: (800) 382-5516 335 Merchant Street, Rm . 221
Honolulu, HI 96813 • Iowa Website: www .hawaii .gov/dcca/dfi Iowa Division of Banking Telephone Number: (808) 586-2630 200 E . Grand Ave ,. Suite 300 Des Moines, IA 50309-1819 • Idaho Website: www .idob .state .ia .us Idaho Department of Finance Telephone Number: (888) 777-4590 800 Park Blvd ., Suite 200
Boise, ID 83712
Website: www .finance .idaho .gov Telephone Number: (800) 432-3545
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• Kansas • Massachusetts Kansas Office of the State Bank Commissioner Massachusetts Office of Commissioner of Banks Division of Banking Division of Banks 00 SW Jackson, Suite 300 1000 Washington Street, 10th Floor Jay Hawk Tower Boston, MA 02110 Topeka, KS 66603-3714 Website: www .mass gov/dob. Website: www .osbckansas .org Telephone Number: (617) 727-8400 Telephone Number: (800) 432-2310 • Michigan • Kentucky Michigan Department Labor & Economic Growth Kentucky Office of Financial Institutions Office of Financial & Insurance Services 1025 Capital Center Dr ., Suite 200 611 W . Ottawa Street, Floor 3 Frankfort, KY 40601 Lansing, MI 48933
Website: www .kfi .ky .gov Website: www .michigan gov/dleg. Telephone Number: (888) 432-9257 Telephone Number: (517) 373-1140
• Louisiana • Minnesota Louisiana Office of Financial Institutions Minnesota Department of Commerce Depository Division 85 7th Place East, Suite 500 8660 United Plaza Blvd ., 2nd Floor St . Paul, MN 55101 Baton Rouge, LA 70809-7024 Website: www .mn .gov/commerce Website: www .ofi .louisiana .gov Telephone Number: (800) 657-3787 Telephone Number: (800) 351-4889 • Mississippi • Maine Mississippi Department of Banking & Consumer Finance Maine Department of Professional Consumer Finance Division and Financial Regulation 501 N . West St . Office of Consumer Credit Regulation 901 Woolfolk Bldg ., Suite A 35 State House Station Jackson, MS 39225-3729 Augusta, ME 04333 Website: www .dbcf .state .ms .us Website: www .maine .gov Telephone Number: (800) 281-4418 Telephone Number: (800) 436-2131 • Missouri • Maryland Missouri Division of Finance The Commissioner of Financial Regulation for the State 301 W . High Street, Suite 630 of Maryland will accept all questions and complaints Jefferson City, MO 65102-0716 from Maryland residents regarding Associated Foreign Website: www .missouri-finance org. Exchange, Inc ., at: 500 N Calvert Street, Suite 402, Telephone Number: (800) 392-8222 Baltimore, Maryland, 21202, phone toll-free: (888) 784-
0136 . • Nebraska Nebraska Department of Banking & Finance 1230 O Street, Suite 400 Lincoln, NE 68509-5006
Website: www .ndbf .ne .gov Telephone Number: (800) 727-6432
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• Nevada • North Carolina Nevada Department of Business & Industry North Carolina Commissioner of Banks Financial Institutions Division Consumer Industries 1179 Fairview Drive, Suite 201 316 W . Edenton St . Carson City, NV 89701 Raleigh, NC 27603
Website: www .fid .state .nv .us Website: www .nccob .gov/public Telephone Number: (702) 486-3132 Telephone Number: (877) 560-7226
• New Hampshire Customers: • North Dakota New Hampshire Banking Department North Dakota Department of Financial Institutions 53 Regional Drive, Suite 200 2000 Schafer Street, Suite G Concord, New Hampshire Bismarck, ND 58501
Website: www .nh .gov/banking Website: www .nd .gov/dfi Telephone Number: (888) 468-4454 Telephone Number: (800) 472-2600
• New Jersey • Ohio New Jersey Department of Banking & Insurance Ohio Department of Commerce Division of Banking 77 South High St ., 21st Floor 20 W . State Street, 5th Floor Columbus, OH 43213 Trenton, NJ 08625-0040 Website: www .com .ohio .gov Website: www .state .nj .us Telephone Number: (800) 282-0515 Telephone Number: (973) 504-6200
• Oklahoma • New Mexico Oklahoma Office of the State Banking Department New Mexico Regulation & Licensing Department 2900 N . Lincoln Blvd Financial Institutions Division Oklahoma City, OK 73105 2550 Cerrillos Road Santa Fe, NM 87504 Website: www .osbd .state .ok .us Telephone Number: (405) 521-3921 Website: www .rld .state .nm .us Telephone Number: (800) 678-1508 • Oregon Oregon Department of Consumer & Business Services • New York Division of Finance & Corporate Securities Additional terms for REMITTERS in New York . 350 Winter St . NE, Room 410 Associated Foreign Exchange, Inc . (“AFEX”) is a Salem, OR 97301 transmitter of money abroad . It is licensed and regulated by the New York State Department of Financial Services . Website: www .cbs .state .or .us/external/dfcs Any unresolved complaints may be mailed to the New Telephone Number: (877) 877-9392 York State Department of Financial Services, Consumer Assistance Unit, One State Street, New York, NY 10004- • Pennsylvania 1417 . Pennsylvania Department of Banking Department of Banking New York Department of Financial Services 17 N . Second St ., 13th Floor One State St . Harrisburg, PA 17101 New York, NY 10004-1417 . Website: www .banking .state .pa .us Website: www .dfs .ny .gov Telephone Number: (800) 441-2555 Telephone Number: (800) 771-7755
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• Puerto Rico • Utah Puerto Rico Office of Commissioner Utah Department of Financial Institutions of Financial Institutions 324 South State St ,. Suite 201 Centro Europa Building, Suite 600 Salt Lake City, UT 84111-0089 1492 Ponce de Leon Avenue San Juan, Puerto Rico 00907 Website: www .dfi .utah gov. Telephone Number: (801) 530-6601 Website: www .ocif .gobierno .pr/index_eng .html
Telephone Number: (800) 981-7711 • Vermont Vermont Department of Banking, Insurance, Securities & • Rhode Island Health Care Administration Rhode Island Department of Business Regulation 89 Main Street, Drawer 20 1511 Pontiac Avenue Montpelier, VT 05620 Cranston, RI 02920 Website: www .bishca state. vt. us. Website: www .dbr .state .ri .us Telephone Number: (800) 649-2424 Telephone Number: (401) 274-4400
• Virginia • South Dakota Virginia State Corporation Commission South Dakota Division of Banking & Finance Bureau of Financial Institutions Division of Banking 1300 E . Main St ., Suite 800 217 ½ W . Missouri Richmond, VA 23218 Pierre, SD 57501-4590 Website: www .scc .virginia .gov Website: www .dlr .sd .gov/banking/default .aspx Telephone Number: (800) 552-9963 Telephone Number: (800) 300-1986
• Washington • Tennessee Entities other than FDIC insured financial institutions Tennessee Department of Financial Institutions that conduct money transmission activities in Washington 414 Union Street, Suite 1000 State, including the sale of payment of money or credit Nashville, TN 37219 are required to be licensed . If there are questions or Website: www .state .tn .us/tdfi concerns regarding a transaction with a licensee please Telephone Number: (800) 342-8385 contact the Washington State Department of Financial Institutions at (360) 902-8703 or by mail at: Department • Texas of Consumer Services, 150 Israel Road Southwest, Contact information for complaints: Olympia, WA 98504-1200 . Associated Foreign Exchange, Inc . dba AFEX is licensed To file a complaint, please provide: the name of the under the laws of the State of Texas, and by state law is company, office location, and who you contacted at the subject to regulatory oversight by the Texas Department company; your name, mailing address, and ten digit phone of Banking . Any consumer wishing to file a complaint numbers; and a simple explanation of the problem, with against Associated Foreign Exchange, Inc . dba AFEX a list of events in chronological order, making sure to should contact the Texas Department of Banking . include names and dates . Be specific and as brief as If you have a complaint, contact AFEX at complaints . possible . For electronic submission, please complete us@afex .com . If you still have an unresolved compliant the form found on the website: www .dfi .wa .gov, under regarding the company’s money transmission activities, Consumer Information: File a Complaint . please direct your compliant to Texas Department of Banking, located at 2601 North Lamar Boulevard, Washington Department of Financial Institutions Austin, Texas 78705, 1-877-276-5554 (toll free), 150 Israel Road SW www .dob .texas .gov Tumwater, WA 98501
Website: www .dfi .wa .gov Telephone Number: (206) 464-6684
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• West Virginia The type of non-public Personal Information we collect can West Virginia Division of Banking include your: One Players Club Drive Suite 300 • Social security number (SSN or Taxpayer Identification Charleston, WV 25326-1789 Number); and • Credit history and credit scores . Website: www .wvdob .org Telephone Number: (800) 368-8808 How do we use information?
• Wisconsin We use the Personal Information collected as described in Wisconsin Department of Financial Institutions this Statement in the following ways: Division of Banking – Licensed Financial Services Section • To deliver products and services (e .g ;. process 345 W . Washington Ave ., 4th Floor applications, complete transactions, etc .); Madison, WI 53703 • To advertise and market our products and services; • To conduct research and analysis (e g. .; analyze data to Website: www .wdfi .org prevent fraud, etc .) Telephone Number: (800) 998-0700 • As otherwise required or permitted by law or with your consent . • Wyoming Wyoming Department of Audit How do we share information? Division of Banking In keeping with AFEX policy, we do not share non-public 122 West 25th Street information with anyone, except as described below . Cheyenne, WY 82002 We may share Personal Information as required or permitted Website: audit state. .wy .us/banking by law: Telephone Number: (800) 438-5799 • To report or seek information about your credit, and to report or collect on debts owed; Privacy Statement • To comply with legal orders and government requests; • To combat fraud or criminal activity, and to protect the This Privacy Statement describes how AFEX collects rights of AFEX or others; and/or both, personal and non-personal information; how it • With Vendors (who are required to safeguard Personal uses and shares this information . This Statement also Information) that help us operate our business . explains what choices you have in managing your privacy . Financial companies choose how they share your personal When you close your account, we continue to share information . Federal law gives consumers the right to limit information about you as permitted by law . some but not all sharing . Federal law also requires us to tell you how we collect, share, and protect your personal What are your choices? information . You may tell us to stop sending you marketing information . We will still communicate with you in connection How do we collect information? with servicing your account, fulfilling your request, or AFEX collects non-public Personal Information about you administering any promotion or any program in which you from the following sources: may have elected to participate . Materials we send you may still include some offers or promotions . It may take some • Information we receive from you on applications or other time for us to process your request and, consistent with forms; applicable law, could take up to 30 days . If you have more • Information about your transactions with us, our affiliates, than one account with us, you must tell us your choices or others; and separately for each account . • Information we receive from a consumer reporting agency .
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Disclosure of and Control over Personal Information these e-mails ask consumers to reply, or “click” a link We will only disclose personal information to other AFEX to a fraudulent web page that will ask for personal group companies or third parties for everyday business information, such as their credit card number, Social purposes, such as to process your transactions, maintain Security number or account password . These fraudulent your account(s), perform information technology functions, e-mails are often difficult to identify but there are some respond to court orders and legal investigations, report to techniques you can use to protect yourself . Below are credit bureaus, or to offer our products and services to you . some examples: Please note that these disclosures are not subject to an opt-out choice, as such disclosures are necessary to run our E-mail Greetings everyday business . Always be suspicious of e-mails that do not greet you by name . While not impossible, it is more difficult and costly Confidentially and Security of Personal Information for phishers to associate an e-mail address with the AFEX restricts access to non-public personal information e-mail owners name on a mass scale . Because of this, about you to those employees who need to know that phishing e-mails most often are addressed generically information to provide products or services to you . We like “Dear Customer” or “Dear Account Holder ”. maintain physical, electronic, and procedural safeguards When you receive an e-mail from AFEX related to your that comply with federal standards to guard your non-public account, the email will include your account number . If personal information . you receive an e-mail regarding your AFEX Account but it does not contain this information, it may be fraudulent . If If, at any time, you have questions, concerns or comments you are concerned about the legitimacy of an e-mail from about our Privacy Policy, please feel free to contact AFEX at AFEX you can forward the e-mail to fraud@afex .com . 21045 Califa Street, Woodland Hills, CA 91367, or via email If the e-mail is fraudulent we will take the appropriate at: compliance .us@afex .com . actions .
Sense of Urgency Fraud Protection Phishing e-mails often try to create a false sense of urgency intended to provoke the recipient to take Identify Theft immediate action; for example, phishing e-mails Identity theft occurs when someone uses your name or frequently instruct recipients to “validate” or “update” personal information, such as your Social Security number, account information or face cancellation . Be very cautious driver’s license number, credit card number, telephone of any e-mail asking you to update sensitive information number or other account numbers, without your permission . particularly if it has a generic greeting (see above) . Identity thieves use this information to open credit accounts, bank accounts, telephone service accounts, and make major Links in E-mails purchases—all in your name . Nearly every commercial e-mail today contains a “link to a website,” or website address (URL) . Links are used by How Does Identity Theft Happen? business as a convenience for their customers to help Identity theft commonly begins with the loss or theft of a them easily find information the customer is looking for . wallet or purse . But there are many other ways that criminals Unfortunately, phisher’s also use links to drive customers can get and use your personal information in order to to “fake” or “spoofed” websites . Look for the warning commit identity theft . The following are some examples: signs outlined above (generic greetings, sense of urgency) . If you are suspicious of the e-mail, do not click • Phishing (pronounced “fishing”) refers to fraudulent on any links contained in it . Instead, go to the website communication designed to deceive consumers into by using your “favorites” if you have it saved, or type the divulging personal, financial or account information . website’s URL directly into your browser . Phishing e-mails continue to be prevalent for individuals and companies . Spoofing well-known companies,
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What Should You Do If You Suspect an E-mail Is a Irregular Account Activity Alert Phishing Attempt If we detect a questionable transaction on your account, If you are suspicious of an e-mail you receive, you should we will contact you to verify its legitimacy and may request forward the e-mail to the legitimate company being supporting documentation . impersonated . Today, most financial institutions have an e-mail address where you can forward the suspicious e-mail . Compliance
If you receive an e-mail claiming to be from AFEX that As a Global Payment and Risk Management Solutions you believe to be suspicious, please forward the e-mail institution, AFEX is committed to full compliance with all to fraud@afex .com . We will review the e-mail and, if it is applicable laws and regulations regarding Anti-Money fraudulent, we will take appropriate action . Laundering (AML) . AFEX’s policy is to prevent people engaged in money laundering, fraud, and other financial • Phone Phishing (also called “Vishing”) is another way crimes, including terrorist financing, from using AFEX’s fraudsters try to collect sensitive information from you . In products and services . this type of fraud, the fraudster will either contact you by telephone or send you a fake e-mail and ask for you to AFEX has robust policies and procedures to detect, respond by telephone . prevent and report suspicious activity . To comply with OFAC (Office of Foreign Asset Control) requirements, What Should You Do If You Supplied Sensitive Information and global sanctions, we screen our customer accounts over the Phone to a Suspicious Party? against government watch lists . In addition, we may request If you have already responded to a suspicious caller with that you provide us with documentation to help prove your your AFEX account information and you believe it to be identity or for business verification purposes . We report fraudulent, please contact AFEX immediately by calling suspicious transactions to the financial intelligence unit in your Account Executive . the respective country .
• Dumpster Diving occurs when criminals physically How does this impact me? go through your trash receptacle in an effort to find As part of our AML procedures, we collect information from information you discarded . you to satisfy our Know Your Customer requirements . This means that we may request information from you due to Account Protection Services a specific identification requirement or as a result of our AFEX goes to great lengths to protect your Account from watch list screening process . We may ask you to provide fraudulent use . Below are some examples of the ways we documentation to help confirm your identity or provide protect your Account from fraudulent use . additional information regarding your business . We may also request that you seek pre-approval for utilizing AFEX’s Automated Trade Confirmations services if your account falls within a high risk compliance category . After conducting a transaction with AFEX, the Account’s Primary Contact or Designated Email Address will receive In addition, you are independently responsible for complying a Trade Confirmation disclosing the trade order, including with all applicable laws in all of your actions related to your the transaction amount, rate exchange applied, and delivery use of AFEX’s services, regardless of the purpose of instructions, if applicable . the use .
Monitoring Your Account for Suspicious Transactions AFEX has sophisticated monitoring systems and controls in place to detect fraudulent activity and protect our Client’ accounts from misuse .
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Prohibited Activities Taxation You may not use the any of our products and services for activities that: Taxation laws in either the United States or Canada are complex and their application will depend on the customer 1 . Violate any law, statute, ordinance or regulation . or client’s specific circumstances . When determining 2 . Relate to transactions involving (a) narcotics, steroids, whether or not these products are suitable you should certain controlled substances or other products that consider the impact it will have on your own taxation position present a risk to consumer safety, (b) drug paraphernalia, and seek professional advice on the tax implications it may (c) items that encourage, promote, facilitate or instruct have for you . others to engage in illegal activity, (d) stolen goods including digital and virtual goods (e) items that promote hate, violence, racial intolerance, or the financial exploitation of a crime, (f) items that are considered obscene, (g) items that infringe or violate any copyright, trademark, right of publicity or privacy or any other proprietary right under the laws of any jurisdiction, (h) certain sexually oriented materials or services, (i) ammunition, firearms, or certain firearm parts or accessories, or (j) ,certain weapons or knives regulated under applicable law . 3 . relate to transactions that (a) show the personal information of third parties in violation of applicable law, (b) support pyramid or ponzi schemes, matrix programs, other “get rich quick” schemes or certain multi-level marketing programs, (c) are associated with purchases of annuities or lottery contracts, lay-away systems, off-shore banking or transactions to finance or refinance debts funded by a credit card, (d) are for the sale of certain items before the seller has control or possession of the item, (e) are by payment processors to collect payments on behalf of merchants, (f), are associated with the sale of traveler’s checks or money orders, (h) involve currency exchanges or check cashing businesses, or (i) involve certain credit repair, debt settlement services, credit transactions or insurance activities . 4 . Involve the sales of products or services identified by government agencies to have a high likelihood of being fraudulent . 5 . Violate applicable laws or industry regulations regarding the sale of (a) tobacco products, or (b) prescription drugs and devices . 6 . Involve gambling, gaming and/or any other activity with an entry fee and a prize, including, but not limited to casino games, sports betting, horse or greyhound racing, lottery tickets, other ventures that facilitate gambling, games of skill (whether or not it is legally defined as a lottery) and sweepstakes unless the operator has obtained prior approval from PayPal and the operator and customers are located exclusively in jurisdictions where such activities are permitted by law .
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Contact Us
Los Angeles 21045 Califa Street Woodland Hills, CA 91367
T +1 (888) 307-2339 F +1 (424) 588-5024
Beverly Hills 327 N Beverly Drive, Beverly Hills, CA 90210
T +1 (800) 346-2339 F +1 (310) 274-6167
New York 805 Third Avenue Suite 1210 New York, NY 10022
T +1 (888) 428-2339 F +1 (646) 231-7898
Chicago 1 North Wacker Drive Suite 2355 Chicago, IL 60606
T +1 (312) 920-6800 F +1 (312) 920-6898
Miami 1001 Brickell Bay Drive Suite 2700 Miami, FL33131
T +1 (866) 525-3622 F +1 (866) 525-4127
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Glossary
AFEX Indicative Rate Associated Foreign Exchange, Inc ., a licensed and regulated An unconfirmed directorial rate that can be used as a guide . as a Money Transmitter by several State and Federal Usually quoted outside of normal business hours or when it Regulatory Agencies . is not possible to quote a current market rate .
Beneficiary Intermediary Bank The recipient of funds that are being transferred . A A bank nominated to receive payments on behalf of those beneficiary bank is where the bank account of the banks that cannot have payments sent directly to them beneficiary is held . (because they are not supported in the SWIFT network or because the currency being sent is not the beneficiary BIC/ Bank Identifier Code bank’s local currency) . E .g . A U S. . dollar payment sent to a A code used to identify an individual branch of a bank by beneficiary bank in India would be routed via an intermediary using the SWIFT network . bank in the United States that has a relationship with the beneficiary bank . Direct Debit Intraday Spot Permission to allow AFEX to debit funds automatically from a selected bank account, to cover any payment instructions Where a rate and an amount are locked in . It can be used to created . draw down several payments or just one total amount .
Draft Local Currency An international check issued by AFEX . A country’s domestic currency . E g. . United States Dollar or Canadian Dollar . Forward Contract/ Foreign Currency Forward Maturity Date A foreign exchange instrument that allows you to lock in a favorable exchange rate by purchasing a set amount of The date for settlement or expiration of a Forward Contract . a foreign currency at a fixed price for a future payment obligation . Payee See Beneficiary . Forward Drawdown A wire transfer created using an existing Forward Contract . Payment Reference A unique 16 digit FX International Payments reference IBAN/ International Bank Account Number number applied to every payment . An International Bank Account Number contains an organization’s account number, preceded by the specific Payment Scheduling country codes and branch number . They are typically used Similar to a standing order, payment scheduling allows FX for Euro payments to avoid any extra beneficiary bank IP clients to plan payments with funds automatically being charges being applied by the receiving bank . sent as per their chosen schedule in the future – the client can choose selects the frequency of Payments, can select Incoming Wires/Drafts whether to continue the payments until further notice The receipt of foreign currency payments — either (ongoing) or can select an expiry date (future dated) or may electronically or as a draft . enter a number of installments to be paid .
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Quote Spot/Spot Value A Quote will give you the cost to exchange a certain amount A term describing a foreign exchange transaction in which in a given currency . the settlement date follows within two working days of the trade date . Drafts and wire transfers are typically “sold at Routing Number spot ”. A code used to identify an individual branch of a bank utilizing the local market clearing system . Spot Payment Spot Payment leaves the rate floating until a client with Settlement Date single verification accepts it or a client with dual verification A term used to describe the date on which a trade will be approves it . delivered . Also known as the Value Transaction Date Date The date on which a transaction is initiated/agreed . For spot transactions, this is typically two working days after the transaction date . Value Date See Settlement Date . Settlement Method The method of payment used to fund a wire transfer, draft or Window forward contract . Specifies a future date range during which payments can be made until the total contract amount is settled . This is known Same Day Value as “Drawing Down” . A method of buying or selling foreign currency in which the value date is the same day as the trade date . Products Wire Transfer commonly “sold at same day value” are wire transfers . An electronic payment order transferring funds from one However, this can only be achieved in certain currencies due bank to another . to the time zones of banking systems .
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