EDC — Foreign Exchange Facility Guarantee
At a glance
- No Condition
- Open Date : November 14, 2019
- Information and cultural industries
- Export Development Canada
- Government of Canada
Overview
Eligibility criteria
Eligibility is determined by EDC based on the managerial, technical, and financial capabilities of your company, review of your foreign exchange hedging strategy, and the terms of your financial institution’s foreign exchange facility agreement.
- Managerial, technical, and financial capabilities of your company
- Review of your foreign exchange hedging strategy
- Terms of your financial institution’s foreign exchange facility agreement
Who is eligible
Eligible companies for this grant must demonstrate managerial, technical, and financial capabilities, have a foreign exchange hedging strategy in place, and hold a financial institution's foreign exchange facility agreement.
- Companies with established foreign exchange derivative contracts
- Companies entering into foreign exchange derivative contracts with durations of up to three years
Eligible expenses
There are eligible expenses for this grant:
- Financial institution's collateral or margin requirement for foreign exchange derivative contracts
Evaluation & selection criteria
There are evaluation and selection criteria for this grant. The eligibility for the grant is based on the managerial, technical, and financial capabilities of your company, review of your foreign exchange hedging strategy, and the terms of your financial institution's foreign exchange facility agreement.
- Managerial, technical, and financial capabilities of your company
- Review of foreign exchange hedging strategy
- Terms of financial institution's foreign exchange facility agreement
How to apply
- Step 1: Submit an application to EDC
- Content: Provide information about your company's managerial, technical, and financial capabilities
- Implications: EDC will review your application to assess your eligibility for the grant
- Step 2: Review foreign exchange hedging strategy
- Content: EDC will evaluate your foreign exchange hedging strategy
- Implications: The effectiveness of your strategy will be considered in the eligibility determination
- Step 3: Verify financial institution's foreign exchange facility agreement
- Content: Share the terms of your financial institution's foreign exchange facility agreement
- Implications: EDC will assess the agreement to ensure compliance with grant requirements
- Step 4: Provide details of foreign exchange derivative contracts
- Content: Disclose information on foreign exchange derivative contracts with contract durations and outstanding status
- Implications: EDC will consider providing coverage for collateral or margin requirements based on this information
Grant Summary
Financial institutions can benefit from up to 100% coverage of collateral or margin requirements for foreign exchange derivative contracts under this grant program.
Understanding the Enhanced FX Facility Guarantee by EDC
The Enhanced FX Facility Guarantee offered by EDC provides financial institutions with a valuable opportunity to mitigate risks associated with foreign exchange derivative contracts. Eligible companies can secure up to 100% coverage for collateral or margin requirements, which enhances their capacity to manage currency fluctuations effectively.
Eligibility for this program is determined based on various factors, including the managerial, technical, and financial capabilities of the company. EDC conducts a thorough review of the foreign exchange hedging strategy and the terms of the financial institution's facility agreement to assess suitability for the guarantee.
This initiative supports companies in securing adequate coverage for foreign exchange derivative contracts with durations of up to three years. It also extends coverage to contracts entered into during the guarantee's validity period, offering comprehensive protection against currency market volatility.
By leveraging the Enhanced FX Facility Guarantee, financial institutions can strengthen their risk management practices and optimize their foreign exchange exposure. This initiative underscores EDC's commitment to fostering financial stability and facilitating international trade by providing invaluable support to companies in managing currency-related risks effectively.
Overall, the Enhanced FX Facility Guarantee by EDC is a strategic tool that empowers financial institutions to enhance their capabilities in navigating the complexities of the global currency market, ensuring greater stability and resilience in their operations.
