Private Clients and FX Margin Trading

Innovation is an important feature in providing professional services for the diverse needs of private client wealth planning.

There is a tendency within the world of offshore financial planning to consider everything in terms of the beneficial tax implications of forming a structure. Taxation issues are of course of significant importance in determining the optimum structure for a private client business initiative and for estate planning purposes. However, the benefits of such structures can also extend to addressing points of legislation and thus provide the means for private clients to invest their wealth more efficiently.

One such structure provided by the Fiduciary Services Division is a holding company vehicle which was created to assist Deutsche Bank's Global Foreign Exchange Margin Trading business. This business, which is also available to private clients, offers the sophisticated investor access to the currency markets through spot and forward transactions as well as currency options. In order to support the exposures created by these FX transactions, clients are required to post collateral. The level of collateral required is driven by the currency pairs being traded ($/CHF or $/Yen, for example) and their length (up to 380 days) and is intended to cover the potential market risk of the transactions. This form of trading is based on the principle that there is no standard settlement of the currency purchased.


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