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Innovative Infrastructure and Automation of FX risk management

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HSBC FX Overlay supports you in choosing the optimal FX strategy. We then implement it, comprising calculation, execution, reporting and liquidity management.
Process diagram on FX Overlay workflow. Step 1: strategy definition. Step 2: Calculation of trades. Step 3: Execution of trades. Step 4: Post Trade Services


Consultative dialogue is a prerequisite as we discuss, deliver and implement a strategy that meets your FX risk management requirements.

Strategies are traditionally split into two categories, passive and dynamic, with the aim to reduce uncompensated risk and capitalise on opportunities to enhance portfolio return.

Our open architecture allows you to access a plethora of dynamic strategies from different experienced expert providers with different risk management styles to ensure a diversified approach.

In addition, HSBC is capable of coding your self-developed strategy and making it available on the HSBC platform. To our knowledge, this a globally unique proposition in the Currency Management market.


FX Overlay mandates are serviced through our sophisticated, centralised and proprietary platform. The system was designed with control, oversight and flexibility at the fore and continues to be developed in order to meet the constantly evolving requirements of our clients. We prioritise investment into technology to ensure that we grow alongside our clients, delivering a scalable, best-in-class service without jeopardising risk control (300+ releases p.a.).


HSBC acts as Principal and thus avoids additional costs associated with multiple ISDAs or Prime Broker agreements. We provide interbank liquidity access without limiting the chosen execution protocol. You can choose to trade:

  • At market directly against HSBCs liquidity
  • Via HSBC’s algo suite
  • Transparently on the independently published WM/R benchmark

HSBC bundles all trades against its global balance sheets resulting in an integrated “prime brokerage light” solution. Whilst the FX hedging strategy is defined, integrated and guaranteed centrally, execution and delivery of the strategy can be provided locally on HSBC’s balance sheets around the world.

Post Trade Services

Reporting & Analysis

Our clients receive custom transaction reporting and transaction cost analysis (co-operation with BestX), as well as sophisticated analytics such as FX risk/return effects and causalities in your exposure. This has been supplemented by FX HEAT, a next-generation performance analytics tool that delivers transparency and traceability of the hedge efficiency – a prerequisite for clients looking to gain a deeper understanding on the impact of performance.

Our most recent enhancements extend these reportings to calculate increasingly complex exposure structures. In addition, we integrate our simulation and back-testing functionalities into our core overlay infrastructure. This allows us to historically simulate any strategy / strategy combination / parameterisation (passive / dynamic / hybrid / diversified, thresholds, tenors etc.) in a live client portfolio.

The analytics tools embedded in our FX Overlay infrastructure help our clients to increase transparency, substantiate their decisions and better control the FX effects in their business.

Liquidity Management

FX Overlay strategies are often implemented in fund structures that may have limited options to cover short term liquidity requirements. A classical multi-broker OTC trading setup results in both collateral payments and notional settlements to be exchanged with multiple counterparts. The respective exposures often have opposing directions and there is limited scope to net positions (aside from CLS settlement).

HSBC’s “prime brokerage light” setup both allows perfect netting in the above mentioned scenarios (therefore minimising the cash requirement esp. for collateral purposes) AND allows us to offer additional integrated solutions targeted at improving your liquidity situation – like Collateral netting and Collateral financing.

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HSBC FX Overlay

FX Overlay is an automation and outsourcing solution to help HSBC's clients improve FX hedging efficiency, reduce operational risk and increase transparency.

FX Overlay for Institutional Clients

The HSBC FX Overlay Infrastructure is designed around control, transparency and automation of FX risk management in your portfolio.

FX Overlay for Corporate Clients

HSBC FX Overlay provides a unique infrastructure to automate your FX workflows and allows access to industry-leading FX hedging strategies.


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Need help?

For more information, please contact us at HSBCOverlayFX@hsbc.com