Setting Up Funds Transfer Pricing Rules

This section discusses how to:

Define the funds transfer pricing rules.
Define the base rate.
Define adjustments.
Set up renewals or extensions.

Pages Used to Set Up the Funds Transfer Pricing Rules

Page Name	Definition Name	Navigation	Usage
FTP Rule	FTP_RULE_DEFN	select Financial Services Industries, then select Funds Transfer Pricing Rules, then select Transfer Pricing Rules, then select FTP Rule	Create and maintain the business rules that define how the funds transfer rate calculates PF ledger account balances, position balances, and instrument balances.
Base Rate	FTP_RULE_BSEQ	select Financial Services Industries, then select Funds Transfer Pricing Rules, then select Transfer Pricing Rules, then select Base Rate	Specify the base rate for the funds transfer pricing rule.
Adjustments	FTP_RULE_ASEQ	select Financial Services Industries, then select Funds Transfer Pricing Rules, then select Transfer Pricing Rules, then select Adjustments	Specify optional adjustments to the base rate underlying the funds transfer pricing rule.
Renewals/Extensions	FTP_RULE_DEFN2	select Financial Services Industries, then select Funds Transfer Pricing Rules, then select Transfer Pricing Rules, then select Renewals/Extensions	Set up the funds transfer pricing rule for an instrument that is renewed or extended.
Transfer Pricing Rules - Notes	FTP_DESCRLONG	select Financial Services Industries, then select Funds Transfer Pricing Rules, then select Transfer Pricing Rules, then select Notes	Enter notes to record any information regarding the funds transfer pricing rule.

FTP Rule Page

Use the FTP Rule page (FTP_RULE_DEFN) to create and maintain the business rules that define how the funds transfer rate calculates PF ledger account balances, position balances, and instrument balances.

Navigation

select Financial Services Industries, then select Funds Transfer Pricing Rules, then select Transfer Pricing Rules, then select FTP Rule

Image: FTP Rule page

This example illustrates the fields and controls on the FTP Rule page. You can find definitions for the fields and controls later on this page.

Use this page to set up general information about the transfer pricing rule, including the funding center and ledger event code.

If your data source is Product Detail, determine whether you want to select theSet Rate on Commitment Date option. Then, specify any stratification rules. SelectOverride Cash Flow Rule to override the cash flow rule and select the particular rule in theStratification Rule field.

Base Rate Page

Use the Base Rate page (FTP_RULE_BSEQ) to specify the base rate for the funds transfer pricing rule.

Navigation

select Financial Services Industries, then select Funds Transfer Pricing Rules, then select Transfer Pricing Rules, then select Base Rate

Image: Base Rate page

This example illustrates the fields and controls on the Base Rate page. You can find definitions for the fields and controls later on this page.

Specify a funds transfer pricing rate type to determine how PeopleSoft Funds Transfer Pricing derives the rate. Your choices are:

Derived from Yield Curve (floating rate).

Specify the currency cost of funds ID and the margin by which to adjust the interest rate derived from the yield curve in basis points. Then enter the maturity.
User Specified (fixed rate).

For this option, enter the funds transfer pricing rate in the Fixed Rate field.

Specify the tenor algorithms for this rate in the Term Calc Code(term calculation code) field by selecting from the available options.

Specify whether this funds transfer pricing rate applies to all or a portion of the balance. Select either Percent of Balance and enter the balance percentage, or selectFixed Amount and enter the balance amount. If you are segmenting balances for this funds transfer pricing rule, then insert as many rows as necessary, ensuring that the segments that you specify account for 100% of the balance. Otherwise, the system returns an error message.

Adjustments Page

Use the Adjustments page (FTP_RULE_ASEQ) to specify optional adjustments to the base rate underlying the funds transfer pricing rule.

Navigation

select Financial Services Industries, then select Funds Transfer Pricing Rules, then select Transfer Pricing Rules, then select Adjustments

Image: Adjustments page

This example illustrates the fields and controls on the Adjustments page. You can find definitions for the fields and controls later on this page.

Enter an adjustment type, calculation method, and constraint code. Different fields display, depending upon your prior selections:

Event Based Constraint

Select to evaluate the constraint during each processing period. The adjustment is applied only if the constraint is satisfied. If you do not select this option, then the constraint is only evaluated when the FTP Rate process calculates funds transfer pricing adjustments for each instrument.

Rate Lock Period

If left blank, the minimum posted rate during the entire commitment period is used to calculate the adjustment. If you enter number of days in this field, then the rate lock period is limited to the number of days prior to the start date.

Basis Pts

When specifying a basis point adjustment, the rate is entered as an annual percentage; the FTP engine then prorates it for each reporting period.

However, if you select the Apply at Origination Only check box, the rate is entered as a one-time adjustment and applied in the origination reporting period.

Amount

Enter the adjustment as a base currency amount.

Ledger Event Code

Appears by default from the Rule Templates page, or you may select from a dropdown list. The ledger event codes (previously defined in the warehouse) determine in which PF ledger account the funds transfer pricing adjustment is to be booked.

Funding Center

Defaults from the Rule Templates page, or you may select from a dropdown list. Specifies the department that is to receive the offsetting account entry for the funds transfer pricing adjustment.

COF ID

(Cost of Funds ID). Select if you are selecting a calculation method of Derived from Yield Curve.

Maturity andUOM

Specify the maturity and units of measure by entering the number of days,months, oryears. This applies for the calculation methodDerived from Yield Curve.

YC Date

Enter the yield curve date.

Negate Rate

If this option is checked, the rate returned from the cost of funds curve will have its sign reversed (multiplied by –1). This can be useful when building spread-based adjustments.

For forecasted pools, indicate whether you want to Apply Adjustment and specify theConstraint Code to which the adjustment applies.

Renewals/Extensions Page

Use the Renewals/Extensions page (FTP_RULE_DEFN2) to set up the funds transfer pricing rule for an instrument that is renewed or extended.

Navigation

select Financial Services Industries, then select Funds Transfer Pricing Rules, then select Transfer Pricing Rules, then select Renewals/Extensions

Image: Renewals/Extensions page

This example illustrates the fields and controls on the Renewals/Extensions page. You can find definitions for the fields and controls later on this page.

Calculation Method

Select a calculation method. Values are Maintain Spread orRecalculate Rate.

Renewal Rate Lock

Select to use Renewal Rate Lock.

Rate Lock Period

Enter the Rate Lock Period.

Blended Rate Adjustment

Select to use Blended Rate Adjustment.

This is an option to blend new FTP rates with previous FTP rates for renewals and extensions.

Adjustment Type

Select an Adjustment Typecode.