15.7 Messages from Markit for Prime Increase

The Prime Increase message is consumed from Markit in the same way the drawdown message is consumed in Oracle Banking Corporate Lending. The system processes the new Drawdown message as Prime Increase message only when the following conditions are satisfied:

• The FloatingRateIndex value from the Drawdown message is one of the pre-defined floating indexes in the factory-shipped table, for the Drawdown currency and for the Rate ‘PRIME’.
• The Floating Rate type of the Main Interest component is attached with the resolved Drawdown product during the message processing.
• The Agent reference number is already associated with an active Drawdown in Oracle Banking Corporate Lending.

The checkbox ‘Prime Loan’ at Drawdown product preference is not used to determine the drawdown as Prime Drawdown.

If the agent reference number is already associated with an active Drawdown in Oracle Banking Corporate Lending, the system performs Prime increase by doing a value dated amendment for Drawdown(VAMI).

If the agent reference number is not associated with any Drawdown in Oracle Banking Corporate Lending then:

• The system considers it as a new Drawdown contract and will create a drawdown.
• The system does not validate FloatingRateIndex during new Drawdown processing and floatingRateIndex need not be USD-Prime-Reference.
• Also, the Main Interest component for the resolved product need not be FLOAT and it can be FIXED as well.

If FloatingRateIndex is not USD-Prime-Reference in the Drawdown message and the agent reference number is already associated with an active Drawdown in Oracle Banking Corporate Lending, the message processing fails.

Agent Ref No is displayed in the Value Dated Amendment screen. The system consumes and processes value dated amendment (prime increase).

Once the message is received from Markit and is displayed in the incoming interface browser, the system performs the basic validations of External CUSIP/ISIN, Message ID, Notice Date and MEI Code for participant(s) and borrower. These validations are similar to the validations of other messages which are consumed.

If any of the validations fail or the system is unable to process the message, the system logs the following exceptions.

• Based on the drawdown currency and amount, the availability of Tranche is checked. If there is insufficient availability at the tranche level, the system marks the processing status as Failed by logging an exception -No Availability at Tranche.
  • If manual correction to the Tranche is possible, you can make the necessary changes to the Tranche as part of contract amendment and value dated amendment and change the processing status to Pending, so that the system can re-pick up the message for processing.
  • If manual action is possible, a new corrected message has to be received from Markit. This message have the same Message ID as the original message but with corrected information.
• If a matching participant/borrower is not found at the tranche level, then system marks the processing status as Failed by logging an exception – Participant/Borrower not found at the tranche.
• No rate changes are allowed as part of prime increase. Any information on the rates are ignored in the incoming message.
• If the event date (noticeDate) is earlier than the application date,
  • The system does not process the contract/event in Oracle Banking Corporate Lending and marks the processing status of the incoming message as Pending Authentication.
  • You can change the processing status to Pending/Processed, where Pending indicates that the system can pick the message for re-processing and Processed indicates that no further action is required on the message.
• If the event date (noticeDate) is greater than the application date for a Drawdown Notice (Prime Increase),
  • The system considers the message as an Intent Message and mark the processing status as Hold, irrespective of Effective Date (drawdown value date)
  • The system retains the message in the Incoming Browser till the event date. On the event date during the batch, the system updates the processing status as Pending, so that the job picks up the incoming message for processing.
  • If the event date (noticeDate) is the application date and the effective date is futuredated, the system processes the message to create an uninitiated value-dated amendment and updates the processing status as Processed.
  • The value dated amendment (current/future dated) is created and auto authorized if there are no overrides requiring dual authorization. If there are any such overrides, the drawdown needs to be manually authorized after dual authorization. The processing status is automatically updated as Processed.
  • If the processing fails, the system updates the processing status as Failed and the exceptions are shown in the Exceptions sub-screen. You can manually input the value-dated amendment and change the processing status to Processed.

If the incoming message fails to process due to any data mismatch between the incoming data and Oracle Banking Corporate Lending, you can use the Enrich option for the key important fields.

For the message Prime increase notice, if the notice date is equal to the application date and the effective date is earlier than the application date, the system considers it as a back-dated value-dated amendment and all the back-value checks are applied.

The dual authorization functionality is applicable for these messages and status is updated as Pending Authentication after which you have to manually authorize it. Once authorized, the system updates the process status as Processed.

Exception processing, Re-linking, Clipping of the message is applicable as per the incoming FpML message processing. Only amount increase is allowed as part of prime increase consumption processing.

Incoming messages with Message Name as Drawdown Notice and Drawdown Event Type as New Drawdown Event are placed in the Incoming Browser with the processing status as Pending.

The system processes these messages as follows:

• If the External CUSIP/ ISIN in the message is an active Borrower Tranche, the fields in the Incoming Browser are updated with data from the message/tranche contract.
• The system picks the Branch code as the branch under which the tranche is booked.
• MIS pickup is done based on the tranche MIS maintenance during new Drawdown booking. MIS pick is not done during VAMI for Prime Increase incoming message processing.
• If the Message ID is not already processed and the Agent Ref No in the message is not found for any active Borrower Drawdown contract in Oracle Banking Corporate Lending, the system creates a new Drawdown contract.
• If the Message ID is not already processed and if the Agent Ref No in the message is found for any active Borrower Drawdown contract in Oracle Banking Corporate Lending, a value-dated amendment is booked and VAMB/VAMI events are fired.
  • Markit sends the complete Drawdown Amount after applying Prime increase. Latest Drawdown amount in the system is compared with the amount received in Prime Increase message. Value-dated Amendment is initiated in Oracle Banking Corporate Lending only when the system amount is lesser than the amount received. VAMI is done only for the differential amount and not for the complete Drawdown amount received from Markit.
  • The value- dated amendment is auto-authorized if there are no overrides that require dual authorization.
  • The value-dated amendment will be created as unauthorized if there are any overrides that require dual authorization. The processing status is Pending Authentication in such cases and the drawdown VAMI have to be manually authorized after dual authorization.
  • Based on the Product Set up for messages, automated fax/wire messages attached for VAMB/VAMI events are generated.
  • Once the message is successfully processed in Oracle Banking Corporate Lending as an event and authorized, the system updates the processing status as Processed.
  • If the value-dated amendment is not authorised, while marking the EOTI, the system prompts you to clear pending authorizations.

Note:

• Unauthorised transactions are tracked from EOD pending transactions for you to perform authorisation.
• There is no impact on sighting fund tranches as sighting fund functionality is applicable only for lead agents.