At the same time as IFEMA was developed for foreign exchange transactions, other key agreements were developed by the same groupings for different types of transactions, namely ICOM for international market options and FEOMA, the director contract on currencies and options, which essentially includes the IFEMA and ICOM agreements, foreign exchange transactions and exchange options. This grouping of foreign exchange agreements was then completed by the International Foreign Exchange and Currency Option Master Agreement (IFXCO) in 2005 (again drafted by the same four groups). Market participants understood the need to address the problem of a default counterparty for forward foreign exchange transactions. Given that transactions are based on different value data, the challenge was to apply what merchants do each day in the management of their portfolios, i.e. to give a current value to a flow of forward payment bonds, even though those payments will mature in the future, so that an valuation based on one or the other part will be marked in the market. The 1998 definitions of foreign exchange and exchange options are published jointly by ISDA, EMTA and the Foreign Exchange Committee and are intended to confirm certain transactions governed by (i) the 1992 ISDA Executive Contracts; (ii) the International Foreign Exchange and Options Master Agreement (“FEOMA”), the International Foreign Exchange Master Agreement (IFEMA) and the International Agreement on Market Options (ICOM), published by the Currency Committee in collaboration with the British Bankers Association, the Canadian Foreign Exchange Committee and the Tokyo Foreign Exchange Market Practices Committee; and (iii) other similar agreements. This agreement, the Foreign Exchange and Options Master Agreement (“FEOMA”) is published at the same time as ICOM. The International Foreign Exchange Master Agreement (IFEMA) was published in 1997. It was originally developed by the British Bankers` Association and the Foreign Exchange Committee (an advisory committee sponsored by the Federal Reserve Bank of New York, but independently). IFEMA was published in 1997 by these two groups in collaboration with the Canadian Research Exchange Committee and the Tokyo Information Exchange Market Practices Committee. It should be a common industrial standard, as it is included in the TBMA/GMRA and FEOMA agreements and in the ISDA Loss methodology. Documentary practices in the foreign exchange market have developed very rapidly in recent years.
In the past, due to the somewhat straight nature of foreign exchange trading, brokers acted in confirmations, which were often the only documentation for cash transactions (current delivery) and short-term futures transactions, especially between traders. Confirmations of these transactions are presented by the parties to the booking, the amount of currencies to be exchanged and the exchange rate, trading date and date of value (settlement date). Confirmations often also contain delivery instructions. Due to the large volume of foreign exchange broker transactions, the confirmation process is generally automated; Although all parties, as noted above, include the same information in the confirmations, there is no standard format, except for messages sent via an electronic system, such as. B The Society for Worldwide Interbank Financial Telecommunication (SWIFT).