During the cancelation of forward contract bank charges the interest on the outlay of funds from the customer but why did not the bank charge complete of outlay funds from the customer during cancelation ??
My question is why the only interest is being charged on the outlay of funds???
I think these are just clearing charges. This must be a clearing house like bank which does the clears transactions related to securities and futures. So, I think it cannot keep the whole amount, but rather charge deposit margin and discount cheque’s as fee for bankers acceptance. Actually, it is based on transaction processing at clearing houses rather than subject or treasury theories because, I could not find any professional material related to cancellation of futures and clearing house’s transaction treatment. Somehow, if you can understand, you investing on an underlying asset and it does not belong to the clearing house. This is between the buyer and the seller and over that clearing houses ensures smooth payments and offers protection from credit risk for which it charges it’s fee.
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