4.1 Collateral Assignment

This topic describes the collateral assignment process for different collateral types.

Collateral Margin transfer can be performed using ‘Collateral Assignment Process’ function, available specifically for transferring different types of Collateral as margin for different purposes for positions on different types of instruments.

Both Cash and Securities can be transferred as collateral using this function. Collateral can be assigned for,

• an Agreement, if collateral assignment is for the net collateral required to be exchanged for all the contracts linked to the same agreement
• a Portfolio, if collateral assignment is for the net collateral required to be exchanged for all the contracts booked in the same portfolio
• a Contract, if collateral assignment is for the collateral required to be exchanged for a specific contract

The details that can be captured for Collateral Assignment Process include,

• Collateral party, Margin process and Settlement date for the collateral assignment
• Agreement, Portfolio, or a specific Contract for which collateral are assigned
• Collateral type and purpose (Margin type) of the collateral assignment transaction
• For Cash collateral,
• Margin currency, Margin Account, Collateral Amount, and netting details (if applicable)
• Settlement details to be used for funds transfer, as agreed with the party
• For Securities collateral,
• Details about Securities transferred, price applied for valuation, hair cut (if applicable) and portfolio
• Custodian and settlement party details as applicable for securities transfer
• User Defined Fields configured for collateral assignment process

User can view the details for,

• Margin preferences applicable for the Agreement, Portfolio or a specific Contract selected
• Margin available and required to be transferred as Cash or Securities
• List of contracts linked to the Agreement or Portfolio selected with individual exposures considered

Collateral Assignment transactions can be initiated only for the branch to which user has access.