Foreign Exchange and Derivate Products

Our Foreign Exchange and Derivatives department offers the full range of foreign exchange products and services available on the market. The products are made available to firms of all sizes, and offered in a wide variety of currencies. National Bank’s currency traders give you all the advice you need to effectively manage your foreign exchange risk.

Reporting of Over-the-Counter (“OTC”) Derivatives Transactions in Canada

National Bank of Canada wishes to inform you of the recent changes made to the laws governing the trading and reporting of swaps and other OTC derivative instruments in Canada (the “Reporting Regulations”).

As of October 31, 2014, Canadian market participants, including National Bank of Canada, will be required to report to a designated trade repository certain data pertaining to OTC derivatives trades. Furthermore, any OTC derivative trades entered into prior to October 31, 2014 but still outstanding as of such date must also be reported no later than April 30, 2015, unless they have expired or been terminated by that date.

For more information on the Reporting Regulations, please refer to the summary  that National Bank of Canada has prepared in this regard. For more detailed information, please consult the website of the relevant provincial securities regulator directly in the section below. 

Obtaining a Legal Entity Identifier (“LEI”)

In order to comply with the Reporting Requirements, all participants in the OTC derivatives markets in Canada must obtain an LEI by October 31, 2014.You will therefore be required to obtain an LEI by October 31, 2014 in order to avoid any interruption to your trading activities with National Bank of Canada.

To obtain your LEI, you must follow three easy steps:

1. Visit

2. Complete the registration process. If you have any questions regarding the registration process, please consult the Registration Guide .

3. An LEI will be sent to you by email following your registration.

Please note that the processing time of your LEI request may take five (5) to ten (10) business days. National Bank of Canada will be contacting you to obtain your LEI and other factual information about your entity. We require this information from you at your earliest convenience, but preferably before June 30, 2014 in order to ensure that there is sufficient time to prepare for the October 31, 2014 reporting start date.


Reference Documents and Websites

Reference Documents

External References

If you have any additional questions regarding the foregoing or the Reporting Regulations in general, please email us at


Do you already have your LEI ? Please contact your Account Manager or International Account Manager, who will add the information to your client file. 

Important Update: The Canadian Securities Administrators announced that it intends to extend the date for the commencement of over-the-counter derivatives trade reporting from July 2, 2014 to October 31, 2014. For your convenience, the Summary has been updated to reflect these regulatory changes.

Products and Services

Spot contract

Spot contracts do not protect you against foreign exchange risk. These are contracts where a currency is bought or sold at the prevailing rate, with settlement no more than two business days later.

It would of course be speculative to convert all your currency at the spot rate, since your conversion rate could be much different from the rate you had expected when you entered into the contract with your customer or supplier.

Forward contract

With a forward contract, you can negotiate a rate today to exchange a foreign currency at a future date. It's a contract to buy or sell a currency at a future date at a predetermined rate. The rate on the forward exchange contract is based on the spot rate and the differential in interest rates between the two markets involved.

This type of contract helps you manage your foreign exchange risk because, by setting the exchange rate in advance, you eliminate the uncertainty related to fluctuations in the currency until you pay for or receive it.

Zero-cost range forward

This product is similar to the forward contract, except that you negotiate a range of rates instead of one single exchange rate. This range will enable you to take advantage, to some extent, of favourable changes in the currency, while having a safety net in case of unfavourable fluctuations. The limits of the range are based on the forward rate for the period and your level of risk tolerance.

Forward contracts and zero-cost range forwards can be open for a 30-day period.

Average-rate forward contract

Average-rate versions of forward contracts and zero-cost range forwards can also be used to cover terms greater than 30 days with the same forward contract or zero-cost range forward. With the average-rate forward, you perform your currency conversions at the spot rate throughout the period of the contract, while we calculate the Bank of Canada's average noon rate for the same period. We then make a cash settlement based on the difference between this average and the rate negotiated on your forward contract or zero-cost range forward for the amount covered by the contract. This settlement offsets the spot rate obtained during the period.

Other foreign exchange products

Other options are also available to help you implement a strategy that fits your needs:

  • Fixed-date forward contract: if you know in advance the exact date on which you'll need to make or receive payments in a foreign currency.
  • Swap: if you have accounts payable and accounts receivable in the same currency but at different times.
  • Cap/floor purchase: if you are bidding on a contract.
  • Cap/floor sale: if you decide to wait for the market to reach a certain level before implementing a hedging strategy.
  • And many other more exotic products.

Foreign exchange via Internet

The foreign exchange option is one of the features of our Internet Banking Solutions – Businesses. It offers a complete range of online banking services as well as the ability to obtain rates, carry out transactions and create and consult your own foreign exchange contracts.

Sample strategy for managing foreign exchange risk

Whatever your needs, you are never on your own when it comes to working out and implementing a strategy for managing foreign exchange risk. The international trade managers and our foreign exchange risk strategists are available to meet with you to assess your needs, explain the products in greater detail, and recommend a hedging strategy and a diversified portfolio of hedging instruments.

All of these products and strategies are available for most currencies, whether you are an importer or exporter.


Commodity risk management

Fluctuations in commodity prices can have a negative impact on the stability or growth of your company. At National Bank, we have professionals who can help you develop a risk management strategy tailored to your needs.