1.3.3 ICCF Rule Application Factors

You can apply an interest rule in the following manner:

• Rule can be applied on any contract, irrespective of the currency of the contract and the customer involved.
• Rule can be applied on contracts in a particular currency only, irrespective of the customer involved.
• Rule can be applied on contracts in a particular currency, involving a particular customer only.

Thus, the most general interest application condition can be that an interest rule, which is applicable to contracts in any currency, and involving any customer.

An interim condition is when the rule is applied on contracts in a specific currency, involving any customer. A rule that is applied on contracts in a specific currency and involving a specific customer is a specific condition.

Once an interest rule has been defined, you can link it to a product. This linkage has to be achieved while defining the product. Thus, the definition of a product should ideally be preceded by the definition of all interest rules applicable to the product. If not, the product definition has to be put on hold, the interest rules defined, and then the product linked to the interest rules.

For information on Alternative Risk-Free Rates, refer to Interest Class Maintenance in this User Manual.