17. Defining Attributes of a Deal Product

17.1 Securities Deal Product

In this chapter, we shall discuss the manner in which you can define attributes specific to a Securities (SP) Deal product.

This section contains the following topics:

17.1.1 Defining Securities Deal Product

You can create a securities deal product in the SP Product Definition screen, invoked from the Application Browser.

You can invoke the ‘SD Product Definition’ screen by typing ‘SEDDLPRD’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

In this screen, you can enter basic information relating to a SP product such as the Product Code, the Description, etc.

For any product you create in Oracle FLEXCUBE, you can define generic attributes, such as interest details, tax details, etc., by clicking on the appropriate icon in the horizontal array of icons in this screen. For a Portfolio product, in addition to these generic attributes, you can specifically define other attributes. These attributes are discussed in detail in this chapter.

You can define the attributes specific to a Portfolio product in the SP Product Definition Main screen and the SP Product Preferences screen. In these screens, you can specify the product type and set the product preferences respectively.

For further information on the generic attributes that you can define for a product, please refer the following Oracle FLEXCUBE User Manuals under Modularity:

17.1.2 Product Type

An important detail in defining a product is to specify the type of product you are creating. The product type identifies the basic nature of a product.

A Securities Deal product that you create, can be of the following types:

The accounting entries that are passed, the messages that are generated and the processing of deals involving this product are determined by your entry to this field.

17.1.3 Exchange Rate Variance

For a special customer, or in special cases, you may want to use an exchange rate (a special rate) that is greater than the exchange rate maintained for a currency pair. The variance is referred to as the Exchange Rate Variance.

When creating a product, you can express an Exchange Rate Variance Limit in terms of a percentage. This variance limit would apply to all deals associated with the deal product.

Rate Override Limit: If the variance percentage between the default rate and the rate input is between the Rate Override Limit and the Rate Stop Limit, you can save the deal by providing an override.

Rate Stop Limit: If the variance between the defaulted rate and the rate that is entered varies by a percentage greater than or equal to the Rate Stop Limit, you cannot save the deal.

17.1.4 Specifying Preferences for a Product

Preferences are the options available, for defining the attributes of a product. The preferences that you define for a product will be inherited by all security deals associated with the product.

Click ‘Preferences’ button to invoke the Deal Product Preferences screen. Through this screen you can define preferences for the product you are creating.

When defining a product, you can specify preferences for the product, by either of the following methods:

To associate a deal preference class to a product, click ‘Default From Class’ button the Deal Product Preferences screen. A list of the deal preference classes that you have defined specifically for Securities module of Oracle FLEXCUBE will be displayed. Choose the deal preference class to be associated with the product, from the option list. All the details defined at the class get defaulted here. In addition, you can specify certain attributes for the deal.

Consider Brokerage for Disc. Accrual

Check this option to indicate whether the brokerage component is to be considered for discount accrual on a constant yield basis.

Product Restriction

Branch Restrictions

Indicate whether you want to create a list of allowed branches or disallowed branches by choosing one of the following options:

Categories List

Indicate whether you want to create a list of allowed customers or disallowed customers by choosing one of the following options:

Currency Restrictions

Indicate whether you want to create a list of allowed currencies or disallowed currencies by selecting one of the following options:

Note

This option is enabled only if you have allowed brokers for the deal.

Default fields, From and To leg Safe Keeping details.

For detailed information on the other attributes please refer to the chapter called Defining a Deal Preference Class.

17.1.5 Specifying accounting entries for KEST computation

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.

The system generates the accounting role KEST_GL and the amount tags KEST_BSINT_AMT and KEST_DEAL_AMT for tax on bought sold accrued interest and tax on deal nominal amount respectively. At the time of defining a deal product, you need to specify the accounting entries that need to be passed for KEST calculation.

The accounting entries will be different for the sell and buy legs of a security deal.

You will have to define the following accounting entries to process KEST:

Accounting Role

Amount Tag

Debit/Credit Indicator

Sec Settlement

KEST_BSINT_AMT

Dr

KEST_GL

KEST_BSINT_AMT

Cr

Sec Settlement

KEST_DEAL_AMT

Dr

KEST_GL

KEST_DEAL_AMT

Cr

The accounting entries for the buy leg of a security deal will be:

Accounting Role

Amount Tag

Debit/Credit Indicator

Sec Settlement

KEST_BSINT_AMT

Cr

You need to credit the customer account as the customer earns the KEST amount.

KEST_GL

KEST_BSINT_AMT

Dr

Sec Settlement

KEST_DEAL_AMT

Cr

KEST_GL

KEST_DEAL_AMT

Dr

These accounting entries have to be maintained for the event MSTL (Money Settlement of Securities Deal).

17.2 Specifying the Security Deal Product Restrictions

Securities Deal Product Restriction screen is introduced to maintain the Portfolio and Instrument restrictions for Securities Deal Products.

You can invoke the ‘Securities Deal Product Restrictions’ screen, type ‘SEDPRDRS’ in the field at the top right corner of the Application tool bar and click on the adjoining arrow button.

 

Product Code

Specify the product code. Alternatively, you can select the product code from the list.

Product Restriction

The description will be displayed based on the Product Code selected.

17.2.1 Portfolio Restriction

Class Code

In Oracle FLEXCUBE, each portfolio restriction class that you maintain is identified by a unique ten-character code called a Class Code. You can follow your own convention for devising this code, however, one of the characters of the code should necessarily be a letter of the English alphabet.

Class Description

The description will be displayed based on the Class Code selected.

Portfolio Product Restriction

Portfolio product restriction identifies a unique list of allowed or disallowed portfolio products.

Product Code

It represents the list of Security Product Code maintained under Securities Security Product Definition. Click add icon to display the list of Security Product Code through its option list which has been maintained under Securities Security Product Definition. You have to select one which you want to move to Allowed/Disallowed list.

Product Description

It is the Description of Security Product Code that you choose to Allowed/Disallowed list.

Portfolio Access

Portfolio Id

It is the Internal Security Id for which Security Portfolio has been maintained under Securities Security Portfolio Definition.

Product Code

It is the Security Portfolio Code that has been maintained under Securities Security Portfolio Definition.

Portfolio Description

It is the description of portfolio identification.

Allowed/Disallowed

You can specify portfolio restrictions in the form of an allowed, or disallowed list.

17.2.2 Instrument Restriction

Class Code

In Oracle FLEXCUBE, each portfolio restriction class that you maintain is identified by a unique ten-character code called a Class Code. You can follow your own convention for devising this code, however, one of the characters of the code should necessarily be a letter of the English alphabet.

Class Description

The description will be displayed based on the Class Code selected.

Instrument Product Restriction

Instrument product restriction identifies a unique list of allowed or disallowed security products.

Security Code

It represents the list of Security Product Code maintained under Securities Security Product Definition. Click add icon to display the list of Security Product Code through its option list which has been maintained under Securities Security Product Definition. You have to select one which you want to move to Allowed/Disallowed list.

Product Description

 

Instrument Access

Security Id

It is the Security Id for which Security Product has been maintained.

Product Code

It is the Security Product Code that has been maintained under Securities Security Product Definition.

Security Description

It is the description of Security Identification.

Restriction Type

You can specify portfolio restrictions in the form of an allowed, or disallowed list.