2. Overview of the Money Market Module
This topic contains the following subtopics:
2)The Product Definition Facility
3)Automatic Processing Features
4)Settling/Settlement of Money Market Deals
6)Track and Retrieve Information
The Money Market module of Oracle Banking Treasury Management is versatile and efficient. With it, handle all kinds of placements and borrowings — whether Call, Notice, or Terms — of varying tenors, interest types and interest payment methods. The module is efficient in that it automates processing, accounting and messaging of deals captured in your dealing room system.
The corner stone of this module is the Deal Upload facility. With this facility, you can automatically upload the deals captured in your dealing room system. On upload, you can enrich the deals with additional information relating to accounting and messaging (such as interest accrual, brokerage, tax, rollover, customer advice generation details, etc.). This information determines how deals are handled by the automatic processes that you execute. Processing, thus, requires minimal manual intervention, and is efficient.
2.1.2 Architectural Advantages
In architecture, Oracle Banking Treasury Management is modular yet integrated. That is, front-end modules such as Money Market function around a Core consisting of the Security Management System, the Limits Service, the , etc. This architecture eliminates replication of commonly accessed information in every module. Information that is common to several modules is maintained in the Core of the system (for example, currency information). This is accessed by front-end modules such as MM, FX, , etc. The architecture, thus, ensures that all front-end modules use reliable and consistent data drawn from the Corer.
Oracle Banking Treasury Managements’ architecture also ensures that constantly monitor, real-time, your exposure. Crucial services such as Limits reside at the Core of Oracle Banking Treasury Management. This means that your liability towards a customer is tracked real-time across front-end modules.
2.1.3 Quick and Easy Retrieval of Information
The facility to retrieve accurate information quickly is a key benefit that Oracle Banking Treasury Management offers. Oracle Banking Treasury Management supports standard financial reports. In addition, customize reports to suit your specific requirement. Generate these reports at any time during the day.
The powerful query facility that Oracle Banking Treasury Management offers is another useful management tool. This facility not only functions as a search tool —you to drill down to the very details of a contract or transaction — it retrieves information along with the selection criteria specified.
2.2 The Product Definition Facility
A central feature of the front-end modules of Oracle Banking Treasury Management is the product definition facility. This feature drastically reduces marketing time, thus allowing the bank to focus on and take advantage of the opportunities in the market.
2.2.1 Define Money Market schemes as Products
A product is a specific type of deal that a bank enters into, or a scheme that a bank offers its customers. An MM product can imply a particular type of placement/borrow deal that a bank enters. For example, your bank may provide customers with an overnight borrow facility. This facility can be defined as a product in Oracle Banking Treasury Management. (If your bank offers several types of overnight borrow schemes, each of these schemes can be defined as a product.)
When setting up the module, define the various types of deals you enter into as products. For each product, define attributes such as interest, interest accrual, liquidation, rollover, tax, brokerage details, etc. When you enter into a deal, the deal acquires the attributes defined for the product that it involves.
Figure 2.1: Preference
note: For information on fields, refer toTable 3.2: Preferences - Field Description
2.2.2 The Advantage of defining a product
The product definition facility is a one-time effort. When defining a money market deal type or scheme as a product, specify (amongst other details):
•The tenor
•The rate of interest
•The repayment schedules
•The tax details
•The accounting entries to be passed
•The advice to be generated
The user does not have to specify these details every time a deal is entered. The product definition facility thus reduces the time required to capture a deal.
The product definition feature also facilitates:
•Quick retrieval of information relating to deals of a particular type
•Standardization of money market schemes across branches
•Modification of standard features of a scheme to suit specific requirements
2.3 Automatic Processing Features
Oracle Banking Treasury Management completely automates and tracks all the events in the lifecycle of a money market deal. It
•Generates deal tickets
•Accrues interest
•Liquidates due schedules
•Mature's contracts due for maturity
•Rolls over deals according to your specifications, and
•Automatically generates the specified messages and advice
Using Oracle Banking Treasury Management, process money market deals with fixed, floating, or period interest rates, and with a variety of interest application methods.
Also, define bullet schedules for all components. Oracle Banking Treasury Management allows you to define brokerage on a cumulative or slab basis for each currency. Automate, liquidation of brokerage according to the preferences defined for your broker.
The transfer of funds between parties is always confirmed and corroborated with the exchange of messages, advice or receipts. When defining a product in the MM module, specify the advice and messages that are generated at different events (such as interest liquidation and rollover) in the life cycle of deals involving it. Once an event defined for message generation occurs in a deal, the system automatically generates the advice or notices in the media specified. Configure the format and the contents of the advice to suit your requirement.
2.4 Settling/Settlement of Money Market Deals
All scheduled component and maturity settlements are handled automatically in Oracle Banking Treasury Management by calling the Settlement and Messaging sub-systems. Further, generate, online, all payment transfer messages to correspondent banks together with related settlement accounting entries.
In keeping with its flexible design, Oracle Banking Treasury Management offers you the option to process maturities manually.
The Money Market module provides an extensive feature for rollover of contracts on maturity. The rollovers could be with or without interest, with the option to net withholding tax on rollover.
2.6 Track and Retrieve Information
The interface with the Limits module ensures online counter-party exposure tracking. The module gives you a better handle over your Money Markets portfolio by constantly providing you with real-time and relevant information for efficient asset-liability and maturity management.
During the day or end of the day, you may want to retrieve information on any one of the several operations that were performed by the bank. The generated information is in the form of reports. The following are some of the reports that generate for the Money Markets module:
•MM Brokerage Details
•MM Broker Confirmation Pending Report
•MM Counterparty Confirmation Pending
•Overdue Schedules Report
•Maturity Report