4.9.32.1 Authorizing Overrides

You need to perform dual authorization, if the UDF RATE-VARIANCE is maintained as a non-zero value for tranche or drawdown linked to the tranche contract for any of the following operations:

• Tranche contract booking/amendment

  During tranche contract amendment, if the above UDF value is modified (zero to nonzero, non-zero to zero, or original value is changed) an override is displayed for dual authorization.

• Drawdown contract booking

  During drawdown contract amendment, no override is displayed for dual authorization as the variance rate cap maintenance is done only at tranche level.

• Manually changing rate or spread for tranche/drawdown contracts in the following scenarios:
  • Rate changed for fixed rate contracts through Interest Rate Fixing screen (IRAM)
  • Rate code changed for floating rate contracts through Value Dated Amendment (VAMI) screen.
  • Margin rate changed for Borrower drawdown through VAMI screen.
  • Margin rate changed for Borrower tranche through Margin Maintenance screen.
• Rollover/Re-pricing of drawdowns in the following scenarios:
  • Split rollover capture during drawdown booking/amendment
  • Consolidation Rollover
  • Merge Re-price
  • Split Re-price

If any of the aforementioned operations are performed, the system displays the following override message:

Variance rate cap <value> is maintained for this contract, dual authorization required.

If the override is selected as Yes, the contract is saved for further processing. If the override is selected as No, the save operation fails.

Once the contract is saved successfully, the contract reference number with override details appear in the dual authorization screen for the first authorization.

For more details on the Dual Authorization screen, refer the section Authorizing the overrides for tranche in this chapter of this User Manual.

Once the contract is authorized in the dual authorization screen, final authorization is done.

Note:

If the UDF RATE-VARIANCE is not maintained or maintained as zero, dual authorization is not required.