7. Maintaining Safe Keeping Locations

7.1 Introduction

As a part of the maintenance function, you can define the various Safe Keeping (SK) Locations where securities can be lodged or withdrawn, as and when they are traded with. For every safe keeping location that you define, you have to maintain SK accounts. Therefore to record the movements of a security held at a particular location, simply debit or credit the SK account, depending on whether the security is being lodged, withdrawn, bought or sold.

Safe keeping locations can either be internal or external. An internal location is one where the bank acts as the custodian. While maintaining details of safe keeping locations you are required to indicate whether the SK location is your bank or an external location.

Basic details, of every customer of your bank is maintained in the Customer Information Maintenance screen. Here you assign a unique CIF number to each customer, so that the limit lines can be set for each customer. While defining external SK locations, indicate the CIF code assigned to the particular customer. This aids in tracking limits for every SK location.

The safe keeping locations you have maintained and authorised in this screen are in turn linked to different portfolios, through the Portfolio Definition screen. The picklist containing the location ID’s of the various SK locations, in the Deal On-Line screen, will reflect only those SK location ID’s associated with the particular portfolio.

Therefore, at the time of entering a deal if you specify the SK location ID that has been linked to a particular portfolio, the SK account(s) linked to the SK location is reflected in the picklist. You can specify these SK account in the To and From fields respectively.

You can invoke the ‘Safe Keeping Location Maintenance’ screen by typing ‘SEDXSKLC’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

If you are maintaining details of a new safe keeping location, click on new icon from the tool bar. The Safe Keeping Location detailed screen, will be displayed without any details.

If you are calling a safe keeping location maintenance record that has already been defined choose, the Summary option under SK Location Maintenance. From the Summary screen, double click on a record to open it.

Safe Keeping location Identification

Every safe keeping location that you define needs to be assigned a unique identification code. This ID is in turn linked to a single or to multiple accounts depending on the number of accounts you want to link, to a specific safe keeping location.

Description

In addition to the SK Location ID, you can also specify a title or a short description of the SK location you are defining. This will enable you to identify the SK location quickly.

The short description that you specify is for information purposes only and will not be printed on any customer correspondence.

Customer Identification

You might be holding securities on behalf of your customer therefore it becomes necessary to maintain a customer profile with respect to the securities held. This information can be maintained in the Customer Information Maintenance (CIF) screen, which is part of the Core Entities module of Oracle FLEXCUBE.

The Customer Ids available in the picklist are defaulted from the CIF maintenance screen. By linking a Credit Line to a Liability Number, you actually assign a limit, to the customer linked to the line. Every credit-seeking customer is linked to a liability number and the credit facilities granted to him are tracked against this liability number.

Note

In the Customer Information Maintenance screen, you need to link customers to specific SK Locations. For this purpose you can create a customer category called Safe Keeping Locations. This can be created through the Customer Category detail screen. All the SK Locations that you have maintained can come under this category.

After defining the category, you only need to associate the liability number of the customer with the customer category. The customers thus defined can be linked to a credit line through the Limits maintenance screen.

For further details on the Customer Information Maintenance screen please refer to the Oracle FLEXCUBE user manual Core Entities.

This chapter contains the following sections:

7.2 Exposure Line

This section contains the following topics

7.2.1 Track Exposure Line

To track the maximum limit up to which securities can be held in each SK location you can specify the exposure line for SK location.

After defining the customer ID in the CIF maintenance screen, click on the Limits button and maintain an overall limit for each SK location. You can also specify the limit beyond which you would not like to expose yourself or your customer, to a particular SK location. By defining a limit for each SK location, you can limit your exposure to the particular SK location.

Banker’s Acceptance

You can indicate whether or not the SK location can be used for a Banker’s Acceptance portfolio. The settlement account maintained for this SK customer should be a GL

Refer to the Deal Online chapter of this User Manual for details on processing Banker’s Acceptances.

7.2.2 Specifying SK Location Account

For every SK location that you maintain you can define multiple accounts. Apart from defining individual accounts for each security, you can also define separate accounts for customer and bank portfolios, for the same security.

You can add to or delete from, the list of SK location accounts maintained. To add a new account, click add row button and enter the new SK Account Number. This number will be associated with the particular safe keeping location, to track all future transactions involving the security. To delete an existing SK account, highlight the SK account number and click on the delete row button.

7.2.3 Making Query

Click on the ‘Search’ button in the Summary View screen to display the Query screen.

7.3 KEST

This section contains the following topics

7.3.1 Computation of KEST

KEST is a scheme of levying withholding tax on the income earned by the customers of your bank. This type of withholding tax is applicable only on incomes earned from securities.

Some of the customers might directly pay the KEST amount to the Government. Under such circumstances, your bank need not calculate the KEST amount.

However, for customers who are not paying the KEST directly to the Government, you can calculate the KEST amount. The KEST that has to be paid to the Government can be of two types:

The difference between KEST A and KEST B is that the rate of KEST B is slightly higher than KEST A.

The rate of KEST depends on the type of transaction:

7.3.2 Defining KESTYTPE as a User Defined Field

For every customer that you maintain in Oracle FLEXCUBE, you need to specify:

In Oracle FLEXCUBE, factory shipped UDF’s like KESTTYPE, KEST A and KEST B are available to capture the KEST type of a customer and KEST rates for each type.

7.3.3 Calculation of KEST for ‘Customer Sell’ Type of Transactions

For a particular customer, if you have chosen the KEST type as KEST A or KEST B, the system will pick up an appropriate rate and the customer’s settlement account will be debited with the KEST amount incase of customer sell type of transactions.

7.3.4 Calculation of KEST for Customer Buy Type of Transactions

If you have opted for KEST A or KEST B type of KEST for a customer, the system will obtain an appropriate rate and credit the customer’s settlement account for customer buy type of transactions.

7.3.5 Specifying KEST Type for a Customer

This is specified in the ‘Field Name to Value Definition’ screen, invoked by clicking on ‘Fields’ button in the ‘Customer Information Maintenance’ screen.

Here, you need to specify whether:

7.3.6 Specifying KEST Rates in the Securities Price Definition Maintenance Screen

The current market price of various securities is maintained in the ‘Market Price Definition’ screen. Further, you can update the market price of the securities through this screen.

You need to specify the rates for KEST A and KEST B at the time of maintaining market prices. Therefore, at the time of defining a customer, you need to specify the type of KEST (whether A or B). During market price maintenance for a particular security, you indicate the actual rate for KEST A and KEST B.

Click on ‘Fields’ button in the ‘Securities Price Definition Maintenance’ screen to indicate the rates for KEST A and KEST B. The ‘Field Name to Value Definition’ screen is displayed.

The system will display the user defined fields KEST A and KEST B, if you have maintained these UDF’s. Here, you need to indicate the actual rates for the two KEST types.

Consequently, at the time of processing a security deal for a customer, the system will pick up the KEST rate from the market price maintenance based on the KEST type specified for the customer for a particular security code.

Note

The system will display the override ‘KEST Rates are not entered’ if you try to save the market price details without specifying the KEST rates.

7.4 Specifying Generation of New SWIFT Messages

If you need to generate new SWIFT messages MT 540, 541, 542 or 543 for any transactions involving the transfer (receipt or delivery) of securities, for a counterparty, you must indicate this when you are maintaining the counterparty BIC codes, in the BIC Code Details screen. You can indicate this by checking the ISO15022 box on the screen.

If the messages MT 520, 521, 522 or 523 must be generated for any transactions involving the transfer (receipt or delivery) of securities, for the counterparty, you can leave the ISO15022 box unchecked to indicate the same.