With over 12 years experience in currency conversion, the IMS team has developed a unique Global Payment process. The IMS' Global Payments software, allows you to easily see the true value and the costs associated with your Global Payments. This unprecedented transparency provides your company with highly valuable accounting data; data that will allow you to account for your currency.
FRANTECH IMS POINT OF CONVERSION (POC)
The Point of Conversion is the moment that the currency transaction occurs. It is this moment when the actual value of the currency exchange is determined. IMS believes that its clients should know when the transaction occurs and what additional fees and costs have been applied to their transaction.
Why International Monetary Specialist? Why Transparency?
Franchise Technologies Florida's commitment at IMS, is they are dedicated to providing the best International Payment Systems available along with our Exclusive Reporting system that finally brings 100% true accounting to Global Currency Payment market that still has no real standard of reporting.
Here is an Example showing why common Currency Transaction is Un-secure:
One day a friend called the founders of IMS because he had a problem. $50,000 dollars had disappeared from his bank account. He wanted help to find his missing $50,000.
What happened. He had requested a wired transfer of $1,000,000 from his US bank account to a Bank account in London. Without his instruction, the bank had converted the $1,000,000 into English Pounds. The problem was that this account was for US dollars and so the London bank refused the transfer and sent it back. His US bank account then converted the Pounds back to dollars and redeposited his money back into his US account. However only $950,000 arrived in the account.
When he asked the bank what happened, they had told him that because of market fluctuations(i.e. the value of the dollar went down), $50,000 dollar had been lost. This would have made sense, however, the market had actually shown a 5% gain.
Transparency in Global Payments
The bank management had no accounting for why the $50,000 really disappeared. After extensive interviewing of the multiple layers of bank management and traders involved, IMS uncovered that the bank had used there own currency conversion prices which were in there favor. IMS estimates that some layer or layers of the bank possibly gained as much as $100,000 from this transaction error.
One of the reasons that no money was returned was that the friend's banker did not have an accounting of what had transpired. Because of the multiple layers involved in the transaction.
Whether you wish to believe it or not, this type of situation is not unique. It happens everyday in nearly every transaction. It is inherent in the process due to multiple layers of non-transparency and the nature of the system. In most cases your banking relationship will not prevent this from happening to you. We at IMS believe the accounting of Currency Conversion needs to change. Our founder was motivated to do something about this. IMS now has the worlds best, state of the art International Payment system. Coupled with our Exclusive POC report (Point of Conversion), for the first time, you are secure in knowing the precise value of your currency and the cost of the exchange.
Contact us today and discover how IMS can bring more to your International payments.
What Does The POC Report Provide?
Recently some banks have come under scrutiny for non-disclosure of 100’s of millions of dollars in fees. California Teachers Pension Fund claimed 200M dollars alone. However, this is a world wide and systematic issue. The Bank of International settlement (authorized to Audit all Central Banks) has identified as much as 144B per day that goes unaccounted for in FX exchanges. , In an industry that is supposed to be a Sum Zero market, it is disturbing that such a significant amount of money is not being accounted for.
The Point of Conversion Report properly accounts for and makes an accurate and precise reporting of the transaction including the True Value of your Money and the True Cost that occurs in this process.
In the POC, we characterize and execute appropriately each and every Individual Trade at the actual time you authorize that trade to be executed. You will be able to compare your booking price to the actual offset (base) price at that precise time by our automated computer systems. We then disclose the difference as a cost to you. We don't just do it because its the right thing to do, we do it because 100% accounting provides you the ability to make better business and accounting decisions.
With the right accounting, it is now possible to show an "ordinary expense" in the transaction. IMS is not a tax expert, however, we have acquired the legal opinion of a large international law firm that substantiates the spread disclosed in the POC Report as an "ordinary expense". Each client can receive an individualized Opinion Letter specific to their international currency exchanges and payments.
Please Contact us to explain more and look into our state of the art trading facilities.
The Exchange GAP/Eighth Wonder of the World?
Recently in 2011, the Wall Street Journal and Bloomberg have been posting a lot of news about the latest FX Transparency concern. The state of California Teachers Pension Fund is suing their financial institution handling there FX for $200M in what they deem undisclosed fees hidden in the spreads. The State of Arkansas is suing for $300M. America’s largest hedge fund Black Rock is also suing. It was reported Washington State was awarded a settlement for $11M. .
Another Recent report by the BIS (Bank of International Settlement) also estimates the Gap to be around the mid 3% range, putting the average daily gap at $144,000,000,000 per day. The BIS is the worlds Central Bank responsible to receive and audit all central banks around the world.
No surprise to us, the BIS finally gave a realistic explanation for this huge GAP in the $4T per day market.
Unregulated entities, particularly unregulated parent companies of regulated entities. Differences can create loopholes for financial groups to establish unregulated parent holding companies that end up controlling regulated entities from a completely separate jurisdiction. The unregulated parent holding company’s jurisdiction may not have related regulated entities or not have legal authority to exercise power or oversight over unregulated entities. This hinders supervision. The unregulated parent holding company is under no obligation to provide information to unrelated third parties, such as foreign supervisors, and is not required to produce the information in a meaningful way. Existing protocols for obtaining and sharing critical information do not address unregulated entities that are higher in the organizational hierarchy of ownership.
There are multiple layers of Non-Transparency within the majority of FX Conversions. The BIS states that the retail institution does not receive meaningful accounting of the FX transaction. They describe the accounting of the FX transaction as a contagion. Like the spread of a disease, the accounting permeates to all levels.
If the firm that handles your FX transactions is not receiving meaningful accounting, how can YOU? It is impossible for you to get correct accounting downstream from a contaminated river.
However, IMS is the first organization to provide the POC report, which cleans the upstream contagion and offers True Accounting of your FX transactions and giving s you 100% of the value of YOUR MONEY!
Why Trust in Transparency?
Transparency has been a hot item in the media and by President Obama as it relates to the financial and investment markets. Thousands of pages of new regulations and laws have been passed over the last couple years in an effort to provide more transparency.
We at Franchise Technologies Florida agree that transparency is critical. However, laws and new regulations are not going to solve the issues of the international FX exchange.
As we touched on in the GAP Exchange section, the retail institutions of FX that most businesses work with, do not provide a full accounting and transparency of the FX conversions they execute on your behalf. Thus, over 100 billion per day of value goes unaccounted for.
The issues that we have to tackle are much more then expected in the world of FX commodities compared to other markets.
False Assumptions is one of the biggest issues. People assume there is some central common market of Exchange. There is not. “Well, what about the Inter-Bank Market Rate,” some will say. Well, there is no Interbank to call and get Cash delivered on those Rates. It should be labeled Inter-Bank Rate Indicator.. THERE IS NO CENTRAL MARKET. ALL MARKETS ARE PRIVATE AND WHOLLY SEPARATE. There are other false assumptions, but that one is the most damaging to transparency.
As stated in the WSJ “The SEC typically doesn't have direct jurisdiction over the foreign-exchange market. And the private agreements between custody banks and their clients appear to give banks wide discretion over how they charge funds for currency transactions.”
Another major issue is Not Trading Your Agenda, but THIERS. As quoted by the WSJ, “In correspondence this year with the Los Angeles County Employees Retirement Association, BNY Mellon said it had adhered to all of its agreements and it "has also consistently made clear that it executes all foreign currency transactions as counter-party, and on a principal basis." A principal basis means the bank doesn't act in a client's interests when pricing trades.
The above quote is in relation to a $200M suit filed by California against BNY.
Even though it is possible to individualize each currency trade, the majority of FX conversions are lumped into many of large financial institutions agenda and what pricing best serves them. Thus transparency of your individual trade is impossible.
The last main issue is Incorrect and misleading Time Stamps. The timing factor is the most difficult of all, even if you have a diligent CFO or treasury watching the pricing against the published interbank rate. As published in the WSJ “The custody banks don’t have to provide transaction-time records, so it’s hard for clients to know exactly when a currency exchange took place or whether they received prevailing prices. “There is no common reporting requirement or time-stamp obligation for FX trades,” said a report by investment firm Russell Investments last year.”
We at Franchise Technologies Florida understand the above misconceptions and misreporting issues and have the solution. Our Point of Conversion Report gives a 100% accounting of your FX trades and provides you the security of KNOWING exactly what your money is doing and when.
Contact Franchise Technologies Florida now to start taking Control of your currency exchanges
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