15.8.5 Submit Agency Update Notice

The Submit Agency Update Notice message is the closure message for a trade that has already been received from Markit to notify that the trade is closed in Markit and settlement can be initiated systematically in Oracle Banking Corporate Lending.

The Submit Agency Update Notice message contains the following details.

• Unique identifier for the trade
• Effective date of transfer
• Trade details (same as the trade details received as part of the Syndicated Loan Trade Notice Agent message)

Each Submit Agency Update Notice Message comprises the following primary details.

• tradeID – Unique Trade Id for each Markit trade (consists of Markit Trade Id). LQT Ticket Id is also received if the bank is one of the trade counterparty.
• allocationID – Unique Trade Id for each allocation. This is blank if it’s not an allocated trade. This id is not used for agency trade settlement processing and is used for information purpose only.
• effectiveDate – Actual settlement date, which is the effective date for the transfer(assignment/PRAM) to be triggered in the system. Value date is updated with this date for all the trades under this TradeID.

A system job processes all the uploaded messages. On receipt of this message when system is in online mode during intra-day, the trade is marked as ‘Closed’ in the system and the position update message is sent to Markit, based on the following:

• Based on the trade id, all the trades corresponding to this message are identified.
• To ensure there is not short sell, the seller’s position is validated as follows and if the validations are not met, system rejects the trade confirmation status.
  • The seller’s total current position is arrived by consider the existing position of the seller in the tranche and the trades that are pending for processing, but are confirmed/closed.
  • The trade amount is less than the computed total current position.
• For the Buyer/Seller irrespective of new/existing participant in the system, the tax rules validation is done to verify the following and the trade is rejected if the validations are not successful.
  • At least one open tax rule is maintained for the buyer and seller. Tax rule maintained with ALL customer is not considered.
  • The expiry date of the tax rule is greater than the trade value date.
• The following sighting fund validations are done for trades from Markit.
  • Fronting details should be captured for all drawdowns.
  • Buyer/Seller should be funded for all the past events.
  • Trade value date should not be before the latest actual receipt date for the buyer/ seller.
  • Buyer/Seller should have funded the entire amount for all past events.
  • The change to allow trade to proceed if there are unfunded future events (future dated drawdown) and all past events are funded, are also applicable for Markit/ Clearpar trades.
• If the validation fails for any one particular trade under a tranche, then the individual trades for all the tranches under the particular Markit Trade Id are marked with the confirmation status as Rejected.
• The exception details are updated appropriately to notify the rejection and the error reason.
• Once the trade is marked as Closed in the system, the Position Update Notice message is generated and sent to Markit.

If this message is received when the system is in batch mode, then message is processed as follows:

• The message is consumed by the Java adapter, which would be running even when the system is in batch mode.
• Java adapter logs the details of the messages in a system table.
• System does not process the messages till it resumes to online mode.
• Once the batch is completed, a system job initiates Markit message processing which picks up all the unprocessed messages and initiates the validation/process.
• Effectively the processing of all the agency messages received during batch mode happens once the system is online.

The message processing is successful only when the validations are successful and the Position Update message is handed off to Markit. The following details are updated in the system on successful processing of the Submit Agency Update Notice message.

• Confirmation Status is updated as Closed.
• Process Status is updated with Handoff.
• Markit Trade status is updated as Closed.
• Postion update message status is Handoff.
• Message status is Processed.

If the message processing fails, then the following details are updated in the system.

• Confirmation Status is updated as Rejected.
• Process Status is Extraction.
• Markit Trade status is Closed.
• Position update message status is Pending/Failed.
• Message status is Rejected.

If the buyer/seller/SLT trade is not resolved, then the trade is rejected. You can enrich the trade by selecting the buyer/seller/SLT trade manually. Combination of Markit trade ID and Ext CUSIP/tranche reference number should be selected to fetch a single record. On enriching the buyer/seller, system does the following:

Buyer/Seller is defaulted to all other trades under that Markit trade ID. If bank counterparty is involved, then you should resolve SLT trade for all trades under that Markit trade ID. If resolution of SLT trade can be done for all records, closure processing takes place status is updated accordingly. If System could not resolve SLT trade reference number for any of the trades, then the resolved SLT trade reference numbers remain with the tranches and status fields are not changed. If bank counterparty is not involved, then closure processing takes place and the status fields are changed accordingly.

Enrichment is allowed for SLT trade only if bank counterparty is involved in the trade. On enriching the SLT trade reference number, system carries out validations/resolution is done based on buyer/seller and for all other tranches trade reference number under Markit trade ID.