A Target Redemption Forward (TARF) allows you to buy or sell foreign currency at an agreed “Enhanced Rate” for a number of expiry dates. On each expiry date, profit is generated if the market rate is below the Enhanced Rate. The TARF will continue until the total accumulated profit reaches a set “Target”. If this Target is exceeded on any expiry date, the Enhanced Rate will be adjusted for this expiry to ensure your total profit equals the Target. The TARF is then redeemed early and no further deliveries take place. If the TARF has not been redeemed early, then you will be obliged to buy at the Enhanced Rate, if the market is above the Enhanced Rate on each expiry date.

Because of the possibility of early redemption, a TARF cannot be treated as a hedging product. However it may be suitable if you would like to outperform the forward rate and are flexible about the notional amount hedged.

Requesting a product sheet will help you understand:

> How it works

> Advantages and disadvantages you need to consider

> Example scenarios

Investec has always been supportive of our business. We have worked with a number of their teams – including their FX and commodities specialists – and have always been very happy with their level of service.

Jeanine Wilkinson - Group Treasury Manager, Flybe - January 2014