Question 1

Can I turn off notifications?

Accepted Answer

All clients are currently set to receive notifications as their default setting.

If you message your Relationship Manager or support@wearefreemarket.com, we can switch this for you.

Question 2

Do you add fees for negative interest rates?

Accepted Answer

Custody Fee/Negative Interest

As of 1st October 2022, the applicable total negative interest ‎rate is 0.00% (0.75% ECB rate + -0.25% markup = 0.50%, however, as we are a Payment Institution, not a Bank, we are not permitted to pay interest on funds held on account with us, so the EUR custody fee is adjusted to 0.00%) per annum on the average daily balance in a calendar month on Account held in EUR. Freemarket reserves the right to charge custody/negative interest fees with respect to any other currencies which attract negative interest rate fees in the future.

Why do we charge custody/negative interest fee?

This fee is charged to recover our costs associated with holding funds in a particular currency. It includes negative interest reference rates, which are set by central banks, such as the ECB for funds held in EUR. In addition to the negative interest rates, our mark-up over the reference rate includes certain additional cost components we have to consider, including any other costs such as ECB deposit facility rates passed on to Freemarket by its banking partners.

Normally, banks do not pass their costs on to their customers as they can use the deposit base for lending activities, but due to regulatory restrictions all funds held for payment service providers like Freemarket must be 100% liquid, and so these additional costs are charged to clients like Freemarket.

Thus, as an example, the ECB base reference rate for EUR is currently +0.75% and mark-up is -0.25%, giving a total negative interest rate of +0.50% per annum for EUR balances held on account. However, as we are a Payment Institution, not a bank, we are not permitted to pay interest on funds held on account with us, so the EUR custody fee is adjusted to 0.00%.

Negative Interest Fee Illustration:

A transfer to your account of €100,000 was made on 1st April 2022 and you have given us instructions for an onward transfer of €50,000 on 16th April 2022. There have been no withdrawals from your Freemarket account since then. The remaining balance on your account on 30th April is €50,000. The average daily balance for the month is therefore €75,000 (€100,000 for 15 days and €50,000 for 15 days) The applicable total negative interest rate is 0.25% per annum based on the average daily balance in a calendar month on account held in EUR. Thus, you would be automatically charged €15.63 (€75,000 * 0.25% / 360 *30).

Effective Dates: the new rates as set out in the table below are effective as follows:

New Clients:

Corporate: 1st October 2022

Small Charity & Micro Enterprise: 1st October 2022

Existing Clients:

Corporate: 1st October 2022

Small Charity & Micro Enterprise: 1st October 2022

*As of the Effective Date and Subject to Change without notice.

**Total Interest Rate as of the Effective Date. The total interest rate is indicative only and subject to change without notice.

***Actual 360 is the method that calculates interest daily by counting the number of days in the calendar but uses a fixed 360 length.

****Adjusted to 0.00 as no custody fee is chargeable as total interest rate after applying Bank Mark-up is positive.

Question 3

Do you have a client complaints procedure in place?

Accepted Answer

At Freemarket, we always aim to provide you with the best standards of service when using our product.

Our Relationship Managers and Client Support team are available at all times to help with your inquiries. We recognise that in rare circumstances our service might not have lived up to your expectations. If this is the case, we sincerely apologise if you feel that we have let you down and will continue to do all er can to make things right with you.

Freemarket has a complaints mechanism in place to make sure that we handle complaints and enquiries properly as a fully regulated business. Our regulators at the Financial Conduct Authority (FCA) and the Financial Ombudsman Service (FOS) have provided suggestions and regulations that have guided the creation of the complaint procedure below.

The Head of Compliance will acknowledge and investigate each complaint. A complainant must first submit their complaint to Freemarket, and if they are dissatisfied with the outcome, they may be permitted to submit their complaint to the Financial Ombudsman. You may not be able to file a complaint with the Financial Ombudsman if you agree to our corporate terms and conditions.

To ensure that we have an audit trail and that we have all the facts to help us understand your case, we request that you email support@wearefreemarket.com with the details of your complaint, including your account number (beginning with an ‘A’).

We will then:

Send you written acknowledgement that your complaint has been received;
Contact you further should we require any additional details;
Fully investigate your case and your concerns, followed by issuing a detailed response including an explanation of our decisions and reasons for said decision. If you remain dissatisfied with our response, you have the right to forward your concerns to the Financial Ombudsman Service.

Please note: we always encourage you to allow us to undergo our internal complaints procedure before referring your concerns to the Financial Ombudsman.

Question 4

Do you have a glossary of commonly used terms?

Accepted Answer

At Freemarket, we try to keep things as straightforward as we can. However, if there are any terms that are unclear, we’ve compiled a glossary to help explain.

A

ABA routing transit number

American Bankers Association code originally used on US cheques now also used in Fedwire and US ACH payments.

Anti-Money Laundering (AML)

Checks set out by financial regulators to prevent proceeds from criminal activity being filtered through the banking system. Describes the legal controls that require financial institutions and other regulated entities to prevent, detect, and report money laundering activities. There are multiple layers of checks undertaken by Freemarket:

Client screening – onboarding checks (KYC and various levels of Diligence, depending on the risk of the client) to ensure client is bona fide. Details are refreshed periodically, at a frequency determined by the risk of the client.
Transaction screening – check the beneficiary and other aspects of the payment are bona fide before the payment is sent
Transaction Monitoring – perform checks of payments sent over a period to look for suspicious patterns (e.g. for “smurfing”)

Automated Clearing House (ACH)

A US-based organisation that processes massive amounts of debit and credit transactions such as direct deposit, payroll and vendor USD payments in the USA.

Application Programming Interface (API)

A way for two or more computer programs to communicate or interface with each other, intended to simplify the building of client-side software. It has been described as a “contract” between a client and server, such that if the client makes a request in a specific format, it will always get a response in a specific format or initiate a defined action. Clients use our API to communicate with our system to initiate some action like an exchange or to get details like transfers.

B

Basis points (bp)

Often used in relation to fees, charges and variable mark-ups on currency rates. Each basis point is 1/100th of 1% - for example, 50bp is half a percent i.e. 0.50%.

BBAN

Basic Bank Account Number. In the UK this is the 6 digit sort code + 8 digit account number.

BIC

A Business Identifier Code (BIC) is a unique code that tells the Swift network which bank is making/receiving messages, helping to process payments.

Bid rate

The bid rate is the rate quoted to you when you’re about to buy a currency.

C

Charge type

The type of deduction made by a receiving bank for a priority payment. There are two available payment charge types - ‘Shared’ (SHA) and ‘Ours’ (OUR).

SHA payments: the intermediary bank charges are deducted from the payment amount. As a result, the payment amount received in the beneficiary bank account may be less than the full amount expected.

OUR payments: the intermediary bank charges are covered by the payer and not deducted from the payment amount. The beneficiary receives the full payment amount but the payer will be charged a higher payment fee to cover the intermediary bank charges.

Clearing

The process of confirming, documenting and settling a transaction as well as managing credit and collateral exposures and supporting monitoring and reporting processes. These processes are handled by a clearing house as they require a single, central, trusted entity which can trade with all its members on terms that enable certainty and consistency.

Correspondent bank

Banks are financial institutions that are licensed to provide financial services, such as deposit taking, lending, currency exchange and payment services.A correspondent bank is a bank in one country that is authorized to provide services for another bank or financial institution in a foreign country.

Cross-border payment

Cross-border payment is a term referring to transactions involving individuals, companies, or banks operating in at least two different countries.

Counter-terrorist financing

A multitude of laws and regulations have been enacted to reign in the financing of terrorist activity, and are collectively known as counter-terrorist financing policy. Under these policies, most financial institutions are required to fulfil many strict requirements regarding monitoring customers’ transactions and behaviour, conducting proper due diligence, and maintaining appropriate records.

Currencies

Currencies are a system of money accepted within a country, for example the Pound Sterling in the UK, or the Euro across the Eurozone.

Currency pairs

A currency pair is a quotation featuring two different currencies, with currency being quoted in terms of the other.

D

Delivery date

The delivery date is the date on which the purchased funds are available for payment.

Direct and cover

Non-serial payment messaging where the initiating bank sends a payment message directly to the beneficiary bank (MT103), and sends funds to cover the payment (MT202COV) on an FI-to-FI basis.

E

Enhanced due diligence

A KYC process that provides a greater level of scrutiny of potential business partnerships and highlights risk that cannot be detected by Customer Due Diligence.

Exchange rate

An exchange rate is the price of one country's currency expressed in another country's currency. An exchange rate has two components, the domestic currency and a foreign currency (see currency pairs), and can be quoted either directly or indirectly.

F

Faster Payments (FPS)

The UK's banking initiative for sending sterling payments electronically in the UK and reducing payment times between different domestic banks' customer GBP accounts. Generally, the receiver see the credit on the account within seconds and also be able to access the funds.

FinTS

FinTS (Financial Transaction Services) is a bank-independent protocol primarily used in Europe for online banking.

Foreign exchange

Foreign exchange, FX or Forex is the market in which currencies are traded. Financial institutions and payments providers trade trillions a day.

Forwards

A forward conversion is an agreement, usually with a bank or financial provider, to exchange a specific amount of currencies sometime in the future (greater than two days later) for a specific rate.

I

IBAN

Interchange fee

An Interchange is a fee paid between banks from the acquirer to the card issuer each time a card payment transaction occurs.

ISO currency code

The ISO currency code is the three letters also used in exchange rates. Devised by the International Organization for Standardization it is a country’s two characters and a letter denoting the country’s currency. For example, in Hong Kong the currency is Dollars and so the ISO code is HKD.

K

Know Your Business (KYB)

In Europe: identifying the beneficial owner and taking reasonable measures to verify that person’s identity so that the obliged entity is satisfied that it knows who the beneficial owner is, including, as regards legal persons, trusts, companies, foundations and similar legal arrangements, taking reasonable measures to understand the ownership and control structure of the customer; EUR-Lex

In US: beginning on the Applicability Date, covered financial institutions must identify and verify the identity of the beneficial owners of all legal entity customers (other than those that are excluded) at the time a new account is opened (other than accounts that are exempted).

Know Your Customer (KYC)

Know Your Customer (KYC) is a requirement that protects both financial institutions and their clients. Financial institutions are required to formally verify the identity of all clients and understand the purpose of trading, expected volumes and jurisdictions their clients will use.

Know Your Client's Customer (KYCC)

Where KYC must be conducted on an underlying service user who is not directly contracting with the provider of those services. May be required in certain circumstances for named vIBANs.

L

Local payments

Local payment schemes are payment initiatives set up in a domestic market to make the payment process between banks more efficient. Schemes include ACH, Faster Payments and SEPA.

M

Margin

Margin is financial collateral used to cover credit risk and is set aside as a good will deposit as collateral to hold a position against future trades as security to cover any potential losses the provider may incur as a result of non-settlement of the trade.

Margin call

A margin call means that the exchange rate has moved sufficiently so that the initial margin held is no longer sufficient to support the “open” or unsettled trades and additional deposit is required to cover the risk to the provider.

Measuring rates

Since most currencies are quoted to a maximum of 4 decimal places, movement in currency rates, no matter how small, will have an impact on the price you pay. Rates are measured in three factors. These are spreads, pips and basis points. The spread is the difference between ‘bid’ and ‘offer’ prices.

Mid-market rate

Usually, financial institutions make money by charging different prices for buying and selling a currency. The mid-market rate eliminates this margin, and is the exact halfway point between the two. At Freemarket, is the rate we use for our matched, scheduled currency exchanges.

Money Laundering Reporting Officer (MLRO)

MT103

This is a standardized Swift payment message. It is accepted as proof of payment and includes all payment details such as date, amount, currency, sender and recipient

Multi-factor Authentication (MFA)

An electronic authentication method in which a user is granted access to a website or application only after successfully presenting two or more pieces of evidence to an authentication mechanism.

N

Nostro account

The account that a respondent bank holds at a correspondent bank, usually for the purposes of payment clearing. Described as the Nostro by the respondent bank (as derives from the Latin for ‘ours’). The correspondent bank describes its provision of these accounts to other FIs as a ‘Vostro’ or ‘clearing’ service (Vostro derives from ‘yours’).

O

Offer rate

The offer rate is the rate quoted to you when you’re about to sell currency. Also known as the ask price or sell price.

Open Banking

A banking practice that provides third-party financial service providers open access to consumer banking, transaction, and other financial data from banks and non-bank financial institutions through the use of application programming interfaces (APIs).

P

Payee

A payee is an entity receiving payments through any form of money transfer method. Also known as the beneficiary.

Payer

A payer is an entity, either an individual or organisation, that makes a payment to another entity.

Payment Service Provider (PSP)

Politically Exposed Person (PEP)

Someone who has been entrusted with a prominent public function. A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.

Pip

In currency exchange, Pip stands for “point in percentage”; it is used to describe how values change between currencies. It is usually measured at the fourth decimal point. For example, if the GBP/EUR rate is 1.1425, and the Pound depreciates by five Pips against the Euro, the new rate would be 1.1420; a depreciation of €5 in every £10,000.

Q

Quote rates

The quote rate is the most recent market price that a currency was traded on, meaning a buyer and seller agreed to trade at that price.

R

Regulated entities

Regulated entities are the service providers governed by financial regulation, such as banks, brokers and payments companies.

Real-time pricing

Real-time pricing gives customer information about the actual cost of the transaction at that point in time. For example we will provide the actual exchange rate along with the cost for an exchange that customer could get if the customer choose to execute the transaction at that point in time.

S

Safeguarding

Payment Service Providers acting as Authorised Payment Institutions must ensure that relevant client funds are appropriately identified, managed and protected on a day-to-day basis; this includes the clear segregation, designation and reconciliation of client balances. Client's funds are held in safeguarded accounts at authorised credit institutions (Freemarket’s Banking Partners) in the UK and EEA. Safeguarding requirements are in place to protect client funds if the payment service provider (PSP), in this case Freemarket, were to ever become insolvent.

Sanctions

Economic sanctions are commercial and financial penalties and restrictions applied by one or more countries against a targeted country, group, or individual. Sanctions may include various forms of trade barriers, tariffs, and restrictions on financial transactions.

Settlement date

The settlement date is the day on which a trade or a contract must be reconciled. The buyer must make payment of the sold currency before the conversion is processed and the purchased currency is available for payment.

Single Euro Payments Area (SEPA)

The European's domestic clearing scheme for simplifying the European banking transaction network and processing EUR payments within the SEPA region.

Spot trade

The spot rate is the price quoted with settlement usually for settlement in T+2 (fulfilment / delivery 2 business days after contractual execution) on a commodity, security or currency transaction. The spot rate, also referred to as the “spot price,” is the current market value of an asset at the moment of the quote.

Spread margin

When an institution buys a currency at one price and sells it at another, the difference between the two rates is called the spread margin. It is often denoted in Pips or Basis points.

Swift

Swift stands for Society for Worldwide Interbank Financial Telecommunications. Set up in 1973, it’s a member-owned cooperative that developed a communication platform to transmit secure financial transaction information between the financial institutions it represents.

T

Third-party payments processor

A third-party payments processor lets businesses handle transactions from various channels such as credit cards and debit cards, without having to establish their own banking relationships or set up a merchant bank account of their own.

TOD conversion

A TOD conversion is a conversion that will settle today.

TOM conversion

A TOM conversion is a conversion that will settle tomorrow (T+1). The T stands for Transaction Date.

Triangulation

Triangulation is a method of currency exchange where one currency amount is converted to another through an intermediate currency.

U

UETR reference

This is a unique reference associated with every Swift payment that is kept and shared by each bank involved in the payment.

Ultimate beneficial owner

The person or entity that is the ultimate beneficiary of the company. The underlying reason for identifying UBO is to prevent natural persons with malintent, such as money-laundering or financing terrorism, from being able to hide behind a company, foundation or other legal entity. The ultimate beneficial owner of a legal entity is the natural person who: holds an interest of at least 25% in the legal entity’s capital; OR can exercise at least 25% of the voting rights at the general meeting of shareholders OR is the beneficiary of at least 25% of the legal entity’s capital.

V

Virtual IBAN (vIBAN)

A virtual IBAN (International Bank Account Number) is issued by a bank to allow incoming payments to be rerouted to a different, real, physical bank account.

W

Wholesale rate

The wholesale market used by banks, governments, investment funds and large corporates to buy and sell foreign currency is called the Spot Market. For most currencies, the standard settlement period for spot trades is two business days.

Wire transfer

Wire transfer is the means of transferring money electronically around the world. This can be institutions, individuals or organisations. Also known as a ‘Swift payment’ as wires are dependent on Swift messaging and correspondent banking.

Question 5

Do you make payments to third parties?

Accepted Answer

Before a payment is made to a new beneficiary the account must be checked in order to authenticate its validity and the account is not fraudulent. Once this stage is complete, we can freely make payments to third parties.

Question 6

Do you offer multi-currency IBAN accounts?

Accepted Answer

Yes, we do; a multi-currency account allows you to send and receive money in a variety of different currencies.

While we expand the number of local collection and settlement options you may use on our network, we can make local payments for you and utilise a number of payment networks.

Question 7

Does the platform allow to settle funds globally?

Accepted Answer

The business is global in its reach, and we transfer money internationally. We can pay the designated beneficiary as long as the beneficiary information is accurate and authorised.

Once you have confirmed the transaction's value, provided the beneficiary information is accurate, the funds are available on the platform, and you are using a currency pair you have access to, the transaction information and beneficiary details might permit us to make a payment on your behalf.

It's important to keep in mind that the platform uses UTC time, thus the settlement timeframes may vary as a result. We enable you in optimising your funds across various markets, jurisdictions, and time zones.

Question 8

Have you reconciled the funds that I sent to my Freemarket account?

Accepted Answer

Where funds have been transferred without including a reference, sometimes this may delay us automatically reconciling a payment to your account. Our operations team will have to manually find and reconcile the payment to credit your account. At this stage, please confirm which account the funds should be allocated to and provide evidence that the money should be allocated to that account.

Question 9

How are Freemarket regulated?

Accepted Answer

FreemarketFX Limited is an Authorised Payment Institution (API), authorised and regulated by the Financial Conduct Authority (FCA reference number is 585093). FreemarketFX Ireland Limited is a Payment Institution, authorised and regulated by the Central Bank of Ireland (Firm No. C456818).

APIs can provide customers with a range of regulated payment services. The activities which APIs can undertake are based on their FCA permissions (which can be found in the FCA’s Financial Services Register.)

The Central Bank of Ireland granted Freemarket a license as a Payment Institution pursuant to Regulation 18 of the European Union (Payment Services) Regulations 2018 (you can find more here).

Freemarket’s permissions enable it to carry on payment services activities; this includes receiving bank transfers, processing withdrawals and conducting foreign exchange.

Question 10

How can I add funds to my account?

Accepted Answer

The scheduled exchange allows us at Freemarket to operate a pre-funded model as this is how we are able to achieve mid-market rates and match funds for our clients. The pre-funded model means that all of clients that use the system must transfer the required funds in their entirety prior to the payment order occurring.

The platform allows you to transfer funds before or after booking a payment order with us, although we suggest that you do this beforehand, particularly if you have a sell payment order set up to happen with us. Please bear in mind that we will not proceed with the payment order until we have receipt of all the funds being on the account, once we receive the funds, we will execute the order.

If you require to make a transfer, you can do this on our platform by going to the add funds section on the top of the page by the main menu. From the add funds page, select the currency of the funds you wish to exchange, and the relevant bank details will appear. Once confirmed, you’ll receive an email confirmation once the funds have reached your account and are able to be allocated.