PeopleSoft Enterprise Risk Management 9.1 PeopleBook

Managing Position Limits

This chapter provides an overview of position limits and exposure positions and discusses how to:

Check position limits.
Process limit notifications.
Set respondents for limit notifications.
Define limit notification exclusions.

Understanding Position Limits and Exposure Positions

This section discusses:

Prerequisites.
Positions limits and exposure positions.

Prerequisites

Before you can track and monitor your positions, you must define limit checking controls to manage your exposures on the Tree Manager - Position Limits page.

Position Limits and Exposure Positions

Risk Management works with your organization to manage the positions on the books and exposures related to them. PeopleSoft enables internal control procedures for checking position limits while providing you with a tool to define each person's area of accountability regarding limit violation reviews. You can monitor your exposures, check your limits, and notify the appropriate person of limit violations.

In Risk Management, an exposure is the amount of risk associated to a position from variables such as interest rates or currency exchange rates. Fluctuations in these rate types or in foreign markets can increase or decrease the amount of risk/exposure for a position. You can determine exposures from across the enterprise, and by establishing limits, you can link operational controls and risk management policies and procedures with day to day treasury operations.

PeopleSoft is flexible enough to manage any kind of exposure, including:

Currency exposure.
Interest-rate exposure.
Counterparty risk.
Country risk.
Individual dealer positions.
Specific instrument limits.
Specific business unit limits.

Checking Position Limits

You can check position limits for specified trees and tree nodes on an ad hoc basis.

Page Used to Check Position Limits

Page Name	Definition Name	Navigation	Usage
Ad-hoc Limit Check	POS_ADHOC_LIMITS	Risk Management, Position Limits, Check Position Limits, Check Position Limits Click the Check Limit button on the Check Position Limits page.	Verify limits on an ad hoc basis.

Page Name

Definition Name

Navigation

Usage

Ad-hoc Limit Check

POS_ADHOC_LIMITS

Risk Management, Position Limits, Check Position Limits, Check Position Limits

Click the Check Limit button on the Check Position Limits page.

Verify limits on an ad hoc basis.

Checking Position Limits

Access the Ad-hoc Limit Check page. Click the Check Limit button on the Check Position Limits page).

Check Limit	Select the setID, tree name, and (optionally) the tree node for which you want to process a limit check. Then click the Check Limit button. If you do not select a tree node, the entire tree is selected.
Tree Name	Displays the tree name specified in the Tree Name edit box.
Tree Node	Displays the tree node, if specified in the Tree Node edit box.
Utilization	Displays the amount of the position limit used.
Limit Min (limit minimum)	Displays the minimum amount for this position limit.
Limit Max (limit maximum)	Displays the maximum amount for this position limit.
Internal/External	Displays the internal or external genesis of the position limit. Management or the board of directors typically define internal limits and the counterparty designates external limits.

Processing Limit Notifications

You run the Limit Notification (TR_POS_NOTFY) to check if deals have exceed established limits. If so, the system sends emails and worklist messages to defined users.

Page Used to Process Limit Notifications

Page Name	Definition Name	Navigation	Usage
Limit Notification	TR_AE_RUNCNTL	Risk Management, Position Limits, Limit Notification, Limit Notification	Run the Limit Notification process to run position limit check processing requests.

Processing Limit Notifications

Access the Limit Notification page (Risk Management, Position Limits, Limit Notification, Limit Notification).

State Record

Bind Variable Name or Value are not necessary for the POS_NOTFY_AET state record. The Limit Notification process includes this information.

Setting Respondents for Limit Notifications

Indicate users who have responded to notifications regarding position limits.

Page Used to Set Respondents for Limit Notifications

Page Name	Definition Name	Navigation	Usage
Review Limit Notification	POS_NOTIFY	Risk Management, Position Limits, Review Limit Notification, Review Limit Notification	Specify users who have responded to limit notifications.

Setting Respondents for Limit Notifications

Access the Review Limit Notification page (Risk Management, Position Limits, Review Limit Notification, Review Limit Notification).

Responded

Select who has responded to limit notifications.

Defining Limit Notification Exclusions

You can exclude certain user IDs from receiving position limit notification.

Page Used to Define Limit Notification Exclusions

Page Name	Definition Name	Navigation	Usage
Exclude from Limit Notification	POS_LMT_NFY_NOT	Risk Management, Position Limits, Exclude frm Limit Notification, Exclude frm Limit Notification	For a specific tree and tree node, define who should not be notified regarding limits.

Defining Limit Notification Exclusions

Access the Exclude from Limit Notify page (Risk Management, Position Limits, Exclude frm Limit Notification, Exclude frm Limit Notification).

Select Do Not Notify for each role name that you do not want notified of issues with limits. Automatic Workflow notifications to that role name are then disabled.