Best spot rate for GBP50k single transaction

[Blether]

This question isn't in the general run of trading questions, but here goes:

I'm looking to change about GBP50k (in a bank account in the UK) into JPY (in a bank account that's in Japan, or easily accessed from Japan). Spot rates in the retail market show a buy/sell spread near 10% for this pair. I know the rate goes through USD, but that doesn't make it any less painful.

Can anyone suggest where/how I might get the best rate for this transaction ? I don't mind opening a broker account if it can link to an appropriate JPY account as well as accept the original funds from the UK account. Right now I don't have a broker account anywhere.

The money is bona fide, tax paid and mine. No requirement for 'stealth'.

 

[r.w.]

There's a number of companies catering to this need. Use google, and I am sure you will be able to identify the main contenders.

 

[r.w.]

I think some SB bookies allow for funding / redemption in multpile ccys as far as Im aware. Not sure which ones though.

GJ

The show-stopper there is that they only return money to where it came from for anti-laundering reasons.

 

[gc1]

Interactive Brokers

 

[Blether]

Thanks, r.w. It can be fun to give that answer on message boards I did spend some time with Google using various search terms. All I found was the usual suspects amongst the FX news and margin trading sites. Of course up front they have rates and other things, but you have to dig for the funding details, and I'm not sure margin trading fits my needs so well.

Thanks gammajammer and gc1. I'm keeping spread betting shops and Interactive Brokers on my list of options.

To partially answer my own question, after some more networking I now also have:

Currency UK The Foreign Exchange Process - Currency UK Ltd
HiFX About HiFX | Foreign Exchange Specialists | HiFX plc

Both of which quote about a 1.5% buy-sell spread with real-time rates, work on T+2 settlement by UK bank transfer, and provide onward payment worldwide through SWIFT.

 

[grantx]

Bet GJ's got a few suitcases under his bed for "contingencies".

Grant.

 

[r.w.]

Thanks, r.w. It can be fun to give that answer on message boards I did spend some time with Google using various search terms. All I found was the usual suspects amongst the FX news and margin trading sites. Of course up front they have rates and other things, but you have to dig for the funding details, and I'm not sure margin trading fits my needs so well.

Sorry for being brief. If you had googled 'foreign exchange transfer' the companies mentioned below would have come up.

To partially answer my own question, after some more networking I now also have:

Currency UK The Foreign Exchange Process - Currency UK Ltd
HiFX About HiFX | Foreign Exchange Specialists | HiFX plc

Both of which quote about a 1.5% buy-sell spread with real-time rates, work on T+2 settlement by UK bank transfer, and provide onward payment worldwide through SWIFT.

 

[MrGecko]

Didn't Rod Hull used to keep all his money under the matress (or was it the back of the telly....?).

Anyway, GJ I sympathise; Thanks to japanese housewives, there is absolutely no room under my bed for suitcases

 

[Blether]

Interactive Brokers quote a 5-pip spread for lots >USD25k, and accept GBP funds at Citibank in London. The account must be pre-funded: with a bank account in the UK, I can do that next-day. Sounds like a winner and I'm opening an account.

 

[Blether]

r.w. - no offense taken, and none intended.

 

[a_gnome]

Interactive Brokers quote a 5-pip spread for lots >USD25k, and accept GBP funds at Citibank in London. The account must be pre-funded: with a bank account in the UK, I can do that next-day. Sounds like a winner and I'm opening an account.

Hi Blether,

You may wish to check first about how you get the resultant JPY to your japanese bank and what charges are involved. IB too will have money laundering considerations so although the deal price will be attractive the "logistics" may mean that it won't be worth it.

I agree with r.w. that you want to look for "foreign exchange transfer" companies such as AFEX. They do exactly what you are looking to do with very tight spreads.

 

[Blether]

Hi, a_gnome, and thanks for your post.

This is my thinking so far:

The two online spot forex companies mentioned in the thread so far, HiFX and Currency UK, quote a spread of about 1.5% - so the customer pays about 0.75% cf interbank.

On GBP50k that's GBP375.

IB offers 5 pips, i.e. 2.5 from interbank, with additional commission of 0.2 pips, on size over GBP25k. On the same deal, that's 2.7 x GBP2.50 = GBP6.75.

On size under GBP25k, it's a spread of about 150 pips with 1 pip commission, or the equivalent if one changes GBP50k in lots under 25k, of GBP190.

In either case the difference covers the cost of a few SWIFT transfers - but in the end using any of these methods requires at least one SWIFT transfer to get the money across the national border, so the IB costs aren't any greater - in fact they offer one free withdrawal per month, which means a saving on the transmission end of the transfer. Of course it'll be easy to gain or lose considerably more than these trade fees represent depending on the timing of the trade.

Do you know how AFEX's terms compare ?

 

[a_gnome]

Hi, a_gnome, and thanks for your post.

This is my thinking so far:

The two online spot forex companies mentioned in the thread so far, HiFX and Currency UK, quote a spread of about 1.5% - so the customer pays about 0.75% cf interbank.

On GBP50k that's GBP375.

IB offers 5 pips, i.e. 2.5 from interbank, with additional commission of 0.2 pips, on size over GBP25k. On the same deal, that's 2.7 x GBP2.50 = GBP6.75.

On size under GBP25k, it's a spread of about 150 pips with 1 pip commission, or the equivalent if one changes GBP50k in lots under 25k, of GBP190.

In either case the difference covers the cost of a few SWIFT transfers - but in the end using any of these methods requires at least one SWIFT transfer to get the money across the national border, so the IB costs aren't any greater - in fact they offer one free withdrawal per month, which means a saving on the transmission end of the transfer. Of course it'll be easy to gain or lose considerably more than these trade fees represent depending on the timing of the trade.

Do you know how AFEX's terms compare ?

I don't know about AFEX's terms but I imagine that they are similar to the others. I agree that the IB spread looks the best on the face of it but, as I mentioned before, you will need to check whether they will let you pay the resulting JPY to a different account from the one you funded the IB account with. I suspect that the answer will be no as they will be operating under the same money laundering legislation as everyone else. I would check this side of things carefully first otherwise the tighter spread is irrelevant. You may be able to pay the JPY back to your funding account and then to send it on from there but you will need to check that your GBP account can handle this.

 

[Blether]

So far, the only restriction with any of these providers - and they all have the same restriction - is that the source and destination accounts be in the same name. There is no problem if the different currency accounts are in different national jurisdictions (NB in Japan, for example, overseas remittances above XXXJPY are automatically reported to the government). Yes, I've checked in each case, specifically because, as you say, it can be a deal-breaker.

My limited understanding is that the money-laundering regulations are less restrictive than the banks would have us believe - the fact being that they are more free than they admit, but don't make much/any money from non-resident accounts and use it as an excuse.

In my case, I'm surprised that, recently, although I'm a UK citizen and - so far - I'm denied permanent residence rights in my country of residence, I can no longer open a bank account in my own country. Just think how *extra splendidly* special I'll feel when I bank my tenth million.

 

[a_gnome]

So far, the only restriction with any of these providers - and they all have the same restriction - is that the source and destination accounts be in the same name. There is no problem if the different currency accounts are in different national jurisdictions (NB in Japan, for example, overseas remittances above XXXJPY are automatically reported to the government). Yes, I've checked in each case, specifically because, as you say, it can be a deal-breaker.

My limited understanding is that the money-laundering regulations are less restrictive than the banks would have us believe - the fact being that they are more free than they admit, but don't make much/any money from non-resident accounts and use it as an excuse.

In my case, I'm surprised that, recently, although I'm a UK citizen and - so far - I'm denied permanent residence rights in my country of residence, I can no longer open a bank account in my own country. Just think how *extra splendidly* special I'll feel when I bank my tenth million.

Well, good luck with the whole process with IB and do let us know how you get on.

 

[Blether]

So much for mouthing off. After a few days, here's how it looks.

- In practice the spread on smaller lots is much closer to the larger-lot spread than the sample that customer service gave me when I was opening the account - it's generally been more like 3 or 4 pips for large, 5 or 6 for small.
- On Wednesday I double-checked the price with HiFX by phone - 211.24 (when IB had about 212.75) - and put through a small trade at 212.97 with IB a few minutes later (a limit order that didn't wait as long as I expected).
- I made a withdrawal request online yesterday, and Mizuho Bank just called to say the funds have arrived.

As an observation, the smaller lot price (IB call it 'IDEAL' vs 'IDEALPRO' for the larger lots) has shown fiercer against-trend spikes, which looked to be of the order of 100 pips. Scalpers beware.

The small-lot / large-lot cutover is USD25k equivalent, not GBP25k as I said above, and I used 'interbank' where I meant 'mid-rate'.

Now for the real work of figuring out a target rate for the remaining money. It's great to have such an efficient way to change it - thanks again to everyone who posted.

 

[gc1]

Remember that you only get one "fee free" withdrawal from IB to your bank account per month. So best not to split it into too many separate lots.

 

[ac0302]

New FX BROKER Alex

Hi guys listen I'm an FX trader in Bank London. I'm working for a fully FSA regulated company trading off intrabank live rates. Any one need any FX I would be more than happy to assist just get in touch with a message. We offer very tight rates.

This question isn't in the general run of trading questions, but here goes:

I'm looking to change about GBP50k (in a bank account in the UK) into JPY (in a bank account that's in Japan, or easily accessed from Japan). Spot rates in the retail market show a buy/sell spread near 10% for this pair. I know the rate goes through USD, but that doesn't make it any less painful.

Can anyone suggest where/how I might get the best rate for this transaction ? I don't mind opening a broker account if it can link to an appropriate JPY account as well as accept the original funds from the UK account. Right now I don't have a broker account anywhere.

The money is bona fide, tax paid and mine. No requirement for 'stealth'.

 

[Blether]

Hi. What rate can you offer right now on sell GBPJPY 25k, and buy GBPJPY 25k ? Thanks.

Hi guys listen I'm an FX trader in Bank London. I'm working for a fully FSA regulated company trading off intrabank live rates. Any one need any FX I would be more than happy to assist just get in touch with a message. We offer very tight rates.

 

[ac0302]

Hi call me on 02076458580 my name is Alex ask for me. I cant quote on here because the rates are changing by the second it will be about 147. But call me and speak to Alex.