21 September 2020
This paper provides information about the Mesirow Financial Currency Management (Mesirow) Fiduciary Foreign Exchange (Fiduciary FX) trading service. The information is based on prospective Fiduciary FX client due diligence questionnaires and demonstrations.
Fiduciary FX is an enhancement of the agency foreign exchange approach for trading foreign exchange to settle international trades, to convert foreign income such as dividends, and to hedge currency risk. An agent trades on behalf of its client (typically an asset owner or asset manager (collectively, investor)), seeking the best terms at the time of the transaction. The agent is compensated with an agreed upon fee for its service. An agent who is also a fiduciary has an ethical and legal responsibility to act in the investor’s best interests.
The paper describes the operational aspects of Fiduciary FX as well as providing information that is useful to external international managers that are looking to participate in the Fiduciary FX program including manger onboarding, orders, trading, and post-trade activities.