Where does FX happen in a broking account?
At five points, and at four of them the money is not yours. That is why every row of the map below carries a client money question as well as a pricing one.
Brokers that trade in several currencies often keep client bank accounts in each main currency, so a US dollar premium can come in and go out to the market in dollars with no conversion at all. FX happens where the currency on one side differs from the other: a client or claimant needs paying in its own currency, the bank converts a receipt on arrival, or the firm turns its own brokerage into sterling.
| Step | What moves | Where a conversion can happen | Client money question for your compliance officer |
|---|---|---|---|
| 1. Premiums in from clients | Premium from the insured, a producing broker or a coverholder, in the policy currency or the payer's own currency. | The payer sends a different currency from the policy, or your bank converts the receipt into a sterling account. | Is this premium held under a statutory trust, a non-statutory trust or risk transfer for the insurer, and which account must it reach first? |
| 2. Premiums out to insurers and markets | Net premium after brokerage, paid to insurers and MGAs, or through Lloyd's central settlement for Lloyd's business. | The market must be paid in a currency you did not receive, or a receipt converted on arrival has to be bought back. | Can the conversion be done without changing where the money must be held, and who approves the account it is paid from? |
| 3. Claims in from markets | Claim money and return premiums paid to you for onward payment, in the policy or settlement currency. | Rarely on receipt. Usually later, when the client or claimant needs another currency. | Is claim money client money as soon as it reaches you, and does any risk transfer agreement extend to it? |
| 4. Claims out to clients | Payments to insureds, claimants or their advisers, often abroad and in local currency. | At payment, by your bank or a provider, from a currency balance or after a conversion. | Which account does the payment leave from, and how does the conversion show in your client money calculation and reconciliation? |
| 5. Commission and fees | Brokerage deducted from premiums in the policy currency, fees billed to clients and commission shared with other intermediaries. | When you convert dollar or euro brokerage into sterling for your own costs, or pay a share to an overseas producer. | At what point does brokerage become your firm's money and leave the client account, and is it converted before or after that point? |
The questions are for your compliance officer and your CASS auditor. We set them out so the conversation starts in the right place. We do not answer them for you.
Where Lloyd's central settlement fits
For Lloyd's business, premiums and claims settle through Lloyd's Central Accounting and Settlement. Lloyd's says its Currency Conversion Service translates premiums and claims between currencies at the point of settlement according to the agents' standing instructions, and that it adjusts rates to recover up to 5 basis points. The flows between your firm and your clients sit outside central settlement, and that is where your own FX choices are made. Our page on Lloyd's syndicates and managing agents sets out the Lloyd's service in more detail.
Can a UK broker use a specialist FX provider for premiums held as client money?
Only if your compliance officer and CASS auditor are satisfied it fits your client money arrangements. CASS 5 generally requires client money to be held in a client bank account at an approved bank, so settle this before you compare a single rate.
The answer differs from firm to firm. It turns on whether you hold client money under a statutory or a non-statutory trust, which flows are covered by risk transfer agreements with insurers, what your trust letters and terms of business say and how your client money calculation works. Risk transfer changes the analysis, and each firm has to check its own position. The rules are in CASS 5 of the FCA Handbook.
Questions to take to your compliance officer and CASS auditor before you talk to any provider:
- Which of our flows are client money, which are held under risk transfer and which are our own money?
- Does each risk transfer agreement cover premiums in every currency we collect, and does it extend to claims money and return premiums?
- What would our client money rules require of any conversion, and does our trust arrangement allow anyone other than our client bank to carry one out?
- Would a new account need a trust acknowledgement letter, and who would sign it?
- How would conversions, charges and timing differences show in our client money calculation and reconciliation?
- Can we start with our own money, such as converting brokerage, while the client money questions are worked through?
- Has our CASS auditor seen the proposed account structure before anything is signed?
If a provider is a payment institution or an e-money institution, money it holds for you is safeguarded rather than protected by the FSCS, and the FSCS does not cover payment or e-money services. The FCA's new safeguarding rules for those firms (CASS 15, set out in policy statement PS25/12 published on 7 August 2025) took effect on 7 May 2026. Argentex LLP, a non-bank FX provider, entered special administration on 21 July 2025. None of that tells you whether a provider fits CASS 5. It tells you what to ask about how the provider holds money.
InsuranceFX never holds, receives or routes client money or premiums. It never makes payments and never sends or changes payment details. Every transaction is carried out by the provider your firm contracts with. Our page on client money, CASS 5 and FX sets out where money sits at each step.
How should a broker handle commission and fees earned in other currencies?
Treat the conversion of your own brokerage as a decision rather than a by-product. A London broker placing US dollar business earns much of its income in dollars and pays its staff in sterling, and that conversion is easy to leave to the bank's standard rate.
Brokerage is usually deducted from premium in the policy currency, so it builds up in dollars, euros and other currencies before it leaves the client account. When it may leave is a client money question. Once it has properly left, it is your firm's own money, which makes it a natural flow to price first.
The flows worth looking at:
- Brokerage in US dollars, euros and Canadian dollars converted into sterling, either in one block each month or in many small amounts as it arrives.
- Fees billed to overseas clients and paid in their currency.
- Commission shared with overseas producing brokers and paid in their currency, where each payment can carry its own conversion and charges.
- Profit commission settled once a year, often as a single large conversion.
- Funding overseas offices or paying other companies in the group.
For each flow the questions are the same: how big each conversion is, how often it happens, what markup it carries against the market mid and what payment and receiving charges sit on top.
Illustration only. Assume a broker converts the equivalent of £8 million of US dollar brokerage into sterling in a year. At a markup of 40 basis points to mid that costs £32,000 a year. At 10 basis points it costs £8,000. The arithmetic is amount × basis points ÷ 10,000. The markups are assumptions, not findings about any bank or broker.
Reinsurance brokers see the same pattern in account settlements, cash calls and recoveries in several currencies, with brokerage taken along the way. Our page on reinsurance settlements covers those flows.
Who are the best FX providers for Lloyd's brokers?
There is no list that holds for every broker, and we do not publish rankings. The fair test is to have several providers price the same trades at the same time and to compare each price with the market mid at that moment.
A provider that suits a broker converting large dollar premiums may be the wrong choice for one paying hundreds of small claims in local currencies. The comparison has to start from your own flows, and it has to cover what matters to a broker as well as the rate.
| What to compare | Why it matters to a broker |
|---|---|
| Markup to mid at the time of quote | The rate is where most of the cost sits, and it is rarely shown as a separate charge. |
| Payment and receiving charges | Fees on each payment in or out, and whether premiums arrive short because of deductions along the way. |
| Who pays charges on outgoing payments (OUR, SHA or BEN) | Decides whether a claimant receives the full amount of the claim. |
| Cut-off times by currency | A missed cut-off can mean a late market settlement or a claim paid a day late. |
| Fit with your client money arrangements | Whether the provider can work within your trust and account structure, as your compliance officer and CASS auditor see it. |
| How money is held | A bank deposit, or safeguarding by a payment or e-money institution, and how the provider says it safeguards. |
| Reporting | Statements and references your accounts team can reconcile to the broking ledger without rekeying. |
| Onboarding time and controls | How long the provider's checks take, and whether dual approval and user limits match your own controls. |
A blind quote does the pricing part for you. You tell us the currencies, amounts, timing and flow. We put that to several providers on our panel without your firm's name and show every indicative price side by side with its markup to mid. Quotes are indicative until the provider has onboarded your firm. How blind quotes work
If you already have a bank or provider, a cost review measures what it charges against the mid, conversion by conversion, so you know whether a comparison is worth running at all.
How do we move FX away from our clearing bank without missing a settlement?
Keep the bank. Run a new provider alongside it on your own money first, such as brokerage conversions, and move client money flows only if your compliance officer and CASS auditor sign off the structure.
Measure what you pay now
A cost review of 6 to 12 months of conversions shows your markup to mid by currency and size, so you know what a switch has to beat.
Price your real flows
A blind quote on your regular flows, with indicative rates, charges, cut-offs and onboarding times side by side.
Take the structure to compliance
Your compliance officer and CASS auditor review which accounts would be used for which flows before anything is signed.
Onboard with the provider
The provider runs its own checks on your firm directly. Users, dual approval and payment limits are set up before the first live payment.
Start with your own money
Brokerage conversions and overseas expenses test the provider's pricing, cut-offs and reporting without touching client money.
Move one flow at a time
Away from quarter-end premium accounts, market settlement dates and your client money calculation dates. The bank accounts stay open throughout.
Update payment details safely
Clients, producing brokers and markets hear about any new receiving details through channels they already trust, and confirm by phone on a number they already hold.
Payment diversion fraud is the main risk in any switch: a convincing email with new bank details arrives just as a real change is happening. InsuranceFX never sends, receives or changes payment details. If anyone claiming to be InsuranceFX asks you to change bank details, do not act on it and call us on 020 7566 0044.
Our guide to switching FX provider without missing a settlement has the full staged plan and the insurance settlement calendar.
Can a Lloyd's broker refer its clients to InsuranceFX?
Yes. Your MGAs, coverholders, captives and overseas clients convert premiums and claims of their own, and you can point them to a blind quote or a cost review. The client stays yours.
We deal with each client on its own account and never share one client's prices or data with another firm without its consent. We do not place insurance, approach your markets or offer anything that competes with your broking. The client decides whether to use any provider at all.
Whether InsuranceFX can pay a broker for a referral, and how any payment would be disclosed to the client, is being confirmed under the arrangements of Introvisory Ltd and the insurance distribution rules on conflicts and inducements. Until that is confirmed no referral fee is paid to brokers.
Captive managers and reinsurance brokers refer in the same way. How referrals work
How do we start?
Pick one regular flow, such as last month's dollar brokerage or a run of overseas claims payments, and ask for a blind quote on it. Or send us a year of conversions for a cost review.
Providers see the currencies, amounts, timing, flow and your firm type. They do not see your firm's name, your clients or your markets. If you would rather talk it through first, book a confidential call.
Request a blind quote Ask for a cost review
Sources
- Financial Conduct Authority, FCA Handbook CASS 5, client money for insurance distribution activity, checked 2 November 2026.
- Financial Conduct Authority, PS25/12 Changes to the safeguarding regime for payments and e-money firms, published 7 August 2025, checked 2 November 2026.
- Financial Conduct Authority, Argentex LLP enters special administration, checked 2 November 2026.
- Lloyd's, Foreign exchange: Currency Conversion Service and bespoke FX service, read 2 November 2026.