Understanding Instruments Types and Instrument Templates

You must define your financial instruments before you can capture and administer deals and trades. PeopleSoft delivers more than 40 instruments types that you can use for defining an instrument. These instrument types are derivatives of nine base instrument types. When defining an instrument for a deal, you can use one of the delivered instrument types or you can create a new one by specifying a unique name and selecting a base instrument type from which to base it on.

To facilitate capturing deals, you have the option of creating instrument templates. An instrument template is an instrument type with certain, predefined field values that you can use to capture similar deals.

The Deal Management instrument definition and deal capture processes support the growing number of highly sophisticated, derivative instruments. Having these processes in place enables you to draw from a library of frequently used instrument types, rather than creating new instruments from the beginning. Deal Management also provides:

A medium that enables you to define instruments types using base instrument types as the core building blocks.
Functionality that enables you to create complex instruments, combining attributes from simple instruments.
The ability to create templates to capture and administer similar deals.

To define an instrument, access the Instrument Detail page and enter the instrument's core attributes, including date-specific and accounting treatment information to use as defaults. (The fields and available links change depending the instrument base type that you selected.)

If needed, you can combine instruments to create a more complex instrument.

Instrument base types compose the foundation for defining financial instruments in Deal Management. There are nine fundamental instrument base types from which you can build simple and complex instruments. Use these instrument base types when you define an instrument or create a template:

Interest Rate Physicals

The purchase or sale of interest rate instruments, such as bonds and commercial paper. You can hold these instruments as investments or you can designate them as debts (such as internal or external bank loans).

Note: Commercial paper is covered in greater detail in the "Managing Facilities in Deal Management" topic.

See Understanding Commercial Paper and Line of Credit Facilities.
Interest Rate Swaps
The exchange of fixed and floating rate instruments. Use this base type for interest rate swaps and cross-currency swaps.
Foreign Exchange (FX) Deal Physicals
The purchase or sale of a foreign exchange instrument on a spot or cash basis. This instrument base type applies to transactions bought or sold on a forward basis for delivery on a specified future date.
Option
Use this base type to enter detail attributes for options on another base type. For example, the design of an option on a spot foreign exchange has two parts: the underlying foreign exchange instrument and the option on that instrument.

This base type handles European, American, and Bermudan exercise features, as well as a range of option types, such as Standard, Asian, Lookbacks, Barriers, and others.
Option - Binary Payoff

For binary options where the payoff is a monetary amount.
Future
The purchase or sale of a specific amount of a commodity or financial instrument at a particular price on a stipulated future date.
Commodity
Bulk goods such as grains, metals, and food that are traded on a commodity exchange or on-the-spot market.
Generic
A format that is adaptable to your special requirements.
Equities
The purchase or sale of stocks for the purpose of earning investment income as well as to exert influence or control the board of directors and management of the invested company.

See Understanding Equities.

This table lists the delivered, preconfigured instrument types based on the related instrument base types. Instrument types available to you vary depending on your organization's implementation of Deal Management.

Base Instrument Type	Instrument Type	Description
Commodity	COMMGOLD	Commodity contract on gold
Equity	EQUITY	Equities (stocks)
Foreign Exchange Deal Physicals	FX FWD	FX Forward—a foreign exchange deal set at an agreed upon rate for future execution
Foreign Exchange Deal Physicals	FX SPOT	FX Spot—a foreign exchange deal set at an agreed upon rate for execution in the near future (typically two days in the United States and one day in Canada)
Futures Contract	FUTR-TBOND	Futures contract U.S. treasury bond
Generic Instrument	GENERIC	Generic instrument
Interest Rate Physical	1YR_FLOATR	1-year floating-rate investment
Interest Rate Physical	6MO_COMPPR	6-month commercial paper investment
Interest Rate Physical	BANKDEP	Commercial bank term deposit
Interest Rate Physical	BANKLOAN	Commercial bank loan
Interest Rate Physical	BNKACCEPT	Bankers acceptance
Interest Rate Physical	BONDROLL	Rolling bond - single pay
Interest Rate Physical	CASH	Cash transaction
Interest Rate Physical	CDDAYCOMP	CD term deposit - interest compounded daily
Interest Rate Physical	CDWEEKCOMP	CD term deposit - interest compounded weekly
Interest Rate Physical	COMPAPD	Commercial paper-discount
Interest Rate Physical	COMPAPIB	Commercial paper-interest bearing
Interest Rate Physical	CORPBOND	Corporate bond
Interest Rate Physical	ECD	Euro certificate of deposit
Interest Rate Physical	ECP	Euro commercial paper
Interest Rate Physical	EMTN	Euro medium term note
Interest Rate Physical	FRN	Corporate floating rate note
Interest Rate Physical	JUMBOCD	Jumbo CD
Interest Rate Physical	LCLOAN	Line of credit
Interest Rate Physical	O/N USD	Overnight investment/borrowing
Interest Rate Physical	ON_BOND	Underlying U.S. Treasury bills
Interest Rate Physical	REPO	Repurchase agreement, using two lines—a sell line and a buyback line
Interest Rate Physical	REPOCBOND	Repurchase agreement on a corporate bond
Interest Rate Physical	RREPOCBOND	Reverse repurchase agreement on a corporate bond
Interest Rate Physical	SHARE MTN	Medium-term note
Interest Rate Physical	T-BILL	U.S. Treasury bill
Interest Rate Physical	T-BOND US	U.S. Treasury bond
Interest Rate Physical	TRLOAN	Loan granted by treasury
Interest Rate Swap	AMORTSWAP	Amortizing swap
Interest Rate Swap	BASSWAP	Basis swap
Interest Rate Swap	CCIRSWAP	Cross-currency interest rate swap
Interest Rate Swap	FRA	Forward rate agreement
Interest Rate Swap	IRSWAP	Interest rate swap
Interest Rate Swap	IRSWAP PSC	Interest rate swap - principals swapped at commencements
Option	BINARY	Binary option
Option	FXAMCLPT	FX option - American style exercise
Option	FXBARRIR	FX option - single barrier
Option	IRCAP	Interest rate cap
Option	IRCOLLAR	Interest rate collar
Option	IRFLOOR	Interest rate floor
Option	IRSWPTN	Interest rate swap
Option	OPT_ONFUT	Option on U.S. Treasury bills futures
Option	OPTEQ	Option on equity (stocks)

Understanding Instruments Types and Instrument Templates

Base Instrument Types

Delivered Instrument Types