Counterparty confirmation
The second core function for the back office is to verify the deal from the counter party as soon as possible after the transaction has been done. For bank to-bank trading, the verification can take the form of a confirmation of a deal done through Reuters conversation or trading systems, or a broker’s confirmation if the deal has been done through a broker. Telephone confirmations are also sought for immediate authorisation. Further, the banks have entered into bilateral agreement with counter party banks who are members of CCIL; whereby exchange of confirmations for Forex Interbank deals (matched on CCIL) have been discontinued.
Deals done with customers (non-banks) will normally be confirmed by email, with instructions swapped on the telephone, depending on the arrangements. Increasingly, however, corporate customers are using automatic confirmation-matching services. It is essential that the deal is confirmed independently of the trader before any kind of value is given or payment is made.