Terms of Dealing for Foreign Exchange

November 24th, 2023

Mizuho Bank, Ltd. (hereinafter referred to as “Mizuho”) operates as a dealer in the foreign exchange market and as a party that offers two–way prices on a continuous basis. Mizuho also makes market prices in the foreign exchange market (hereinafter referred to as “Market Maker”) and is providing a wide range of financial services and products in price quoting, order taking, trade execution, and other activities relating to foreign exchange transactions. This disclosure explains Mizuho’s roles and standard dealing practices regarding its foreign exchange transactions with its clients.

This disclosure does not override the laws and regulations apply to Mizuho, its clients (counterparties), or any transactions therein. The governing language of this disclosure shall be Japanese. An English translation is for reference purpose only and shall have no effect.

Mizuho’s Role in FX Transactions with Clients

Unless otherwise agreed to between Mizuho and its client, Mizuho shall act as the principal and for its own account in foreign exchange transactions with the client. That is, Mizuho shall act as a party to the transaction by accepting the risks that may occur in the transaction, such as market risk and credit risk, and does not serve as an agent, trustee, or financial advisor of the client or for any person other than the party of the transaction.

Information Provided by Mizuho

Any information or report regarding the market situation or outlook provided by Mizuho is delivered for the purpose of information provision only and should not be construed as solicitation for any particular transaction. Mizuho shall provide information and prepare reports based on the information that it considers to be credible, but will not guarantee accuracy or certainty. The client is expected to make a final decision on any transaction independently.

Requests from Clients for Transactions

Requests from clients may be conducted in two ways: 1) the client agrees to the price quoted by Mizuho, or 2) the client requests that Mizuho executes a transaction at Mizuho’s own discretion (requests hereinafter being referred to as “Order/Orders”). Clients can also add individual conditions to each Order (such as “At Best,” “Limit,” and “Stop Loss”).

Handling of Orders

The receipt of an Order does not commit Mizuho to executing all or any part of the Order in any particular way, but in accepting an Order, Mizuho is indicating its willingness to attempt to execute that Order. Mizuho may reject any accepted Order at any time, and Mizuho has no obligation to disclose the reason why it is unable to execute an Order in whole or in part.
Unless otherwise agreed to, Mizuho will decide at its own discretion which Orders it will execute, when it will execute them, and how it will execute them (including whether to execute all or part of an Order). When exercising its discretion to execute an Order, Mizuho will consider a number of factors, including the liquidity and prevailing market conditions, along with Mizuho’s own risk appetite and trading strategy. Mizuho may refuse to accept or execute any Order that, in its opinion, carries excessive risk or that may otherwise disrupt or distort market functions.
Similarly, Mizuho may hedge against actual or anticipated risk before executing a client Order (i.e., may perform “pre-hedging”) to reduce risk and market impact if Mizuho believes the risk is excessively large or could disrupt or distort market functions.
Pre-hedging is not undertaken with the intent to disadvantage clients or disrupt the market. However, pre-hedging may affect the prices that Mizuho can offer its clients and the liquidity of the market, which, as a result, may lead to a profit or loss to Mizuho.
If the client explicitly requests that Mizuho not pre-hedge an Order, Mizuho will not pre-hedge the Order. However, Mizuho reserves the right to refuse an Order for which Mizuho has received a request not to pre-hedge. Furthermore, if Mizuho does not pre-hedge an Order at the client's request, the impact on the price that Mizuho can offer to the client and the market liquidity could be greater than in cases where Mizuho had pre-hedged the Order.

All–in Pricing

Unless otherwise agreed to, any firm price quoted by Mizuho to a client is an “all–in” price, which is a total of the prices inclusive of the bid offer spread and any “markup” (hereinafter referred to as “All–in Price”).

“Markup” is the general term for the cost of executing a transaction as incurred by Mizuho in executing the transaction with the client, along with consideration or margin, etc., and includes the following.

  • Transaction execution costs, such as the costs of market transactions, costs of clearance, settlement fees, and fees for third parties involved in the execution of the transaction
  • Consideration of the risk accepted by Mizuho and for the services provided by Mizuho
  • Sales margin

Mizuho’s All–in Prices are tailored to individual clients and are based on Mizuho’s decisions as made in view of a broad range of factors, including market conditions, Mizuho’s own costs, and Mizuho’s relationship with the client. Mizuho reserves the right to offer different prices to different customers for the same or similar transactions. It may also offer difference prices to the same customer according to the type, complexity, or amount of an Order, at its own discretion. Mizuho is not obliged to disclose the amount of revenue that it is expected to earn from a transaction, and the same applies to the components of an All–in Price for a particular transaction.

Please note that any quoted price does not imply the price of inventory that Mizuho held, acquired, or would acquire to execute the transaction with a client. It does also not ensure that there is or will be a market that will allow Mizuho to execute a transaction at a specific price.

Market Making

The offering of two–way prices on a continuous basis in the foreign exchange market and thereby making market prices is referred to as “market making,” and Mizuho acts as a Market Maker. Therefore, Mizuho may execute an Order from one client for the same currency at the same time that it executes another client’s Order, or may transact the same or related products for the purpose of market making or for Mizuho’s own risk management. In such cases, Mizuho retains discretion with respect to how to satisfy its clients’ trade requests, including with respect to Order execution, contract price, priority, and pricing. Mizuho is not required to disclose to a client that it is handling other counterparties’ Orders or its execution of other transactions at the same time as, or on an aggregated basis with, another client’s Order.

As a Market Maker, Mizuho manages foreign exchange positions in aggregate, not by transaction. Mizuho may modify or terminate positions or otherwise execute transactions with other counterparties prior to or alongside a client’s transaction for the purpose of market making, without the intent to disadvantage the client or disrupt the market. This includes pre-hedging.

Mizuho’s own transactions mentioned above can have impact on the prices that it can offer to the client or on market liquidity. This can trigger stop–loss orders, knock–ins and knock–outs of currency options, and similar conditions, but Mizuho will always endeavor to avoid unreasonable impact on the market.

Through market-making, Mizuho may simultaneously execute transactions for several clients who may have conflicts of interest with each other, as well as for Mizuho itself. In doing so, Mizuho will appropriately manage any possible conflicts of interest that are anticipated from the information that it acquires. However, this could result in a profit or loss to Mizuho.

Protection of Client Information

Mizuho has introduced policies, procedures, and management methods to manage and protect the confidential information of its clients in a strict manner.

Mizuho may disclose the confidential information of its clients as necessary in certain circumstances (including, but not limited to the following).

  • To the extent necessary for executing, processing, clearing, assigning, or settling a transaction
  • Where it is required to be disclosed under relevant laws or regulations, or where it is otherwise requested by a relevant regulatory authority, public organization, government ministry or agency, or central clearance organization
  • At the request of a central bank acting for public policy purposes
  • To a party providing services to Mizuho or a third party retained by Mizuho, such as an advisor, consultant, or system vendor, on the condition that such party is obliged to protect such confidential information
  • At the request or consent of the client

Further, Mizuho may share the confidential information of its clients internally for purposes including the following, in accordance with Mizuho’s own policies, procedures, and management methods.

  • To the extent necessary for discussion among sales personnel, market divisions/departments, and related divisions/departments of Mizuho regarding a client’s interest, the purpose of the transaction, and client requests for a transaction, mark–ups, bid offer spreads and the related matters
  • To the extent necessary for ensuring liquidity and risk management relating to transactions
  • To the extent necessary for internal management, such as the evaluation of the transaction’s impact on the market, and for credit risk management, marketing, and client–relations management

Market Color

Mizuho may also analyze, internally share, or disclose to a third party appropriately aggregated and anonymized information regarding transactions requested by its clients and the transactions executed, together with other relevant market information, as “market color” (market overviews).

Please contact our sales representative if you need further information in relation to this disclosure.

Mizuho has expressed its intention to comply with the “FX Global Code” and executed foreign exchange transactions based on this Code. Please click here(PDF/132KB) for our “Statement of Commitment”.

As a liquidity provider, Mizuho has established the “Disclosure Cover Sheet” recommended by the “FX Global Code”. Please click here(PDF/802KB) for our “Disclosure Cover Sheet”.



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