Collateral-Netting details for a Contract

3.2 Collateral-Netting details for a Contract

This topic describes the collateral-netting details for a contract such as agreement applicable for the contract, netting agreement preferences, collateral agreement preferences, contract collateral and netting preferences, and collateral eligible securities for the contract.

While capturing the details for a contract, user can additionally capture the preferences for Collateral Margining and/or Settlement Netting, if applicable for the contract. These preferences can be captured individually for the contract if there are no existing agreements with the contract parties and the preferences are negotiated at the time of booking. Otherwise, agreements applicable for the contract are selected and only specific preferences were captured as override at the contract level.

The details that can be captured for Collateral-Netting include,

Collateral and/or Netting Agreements applicable for the Contract
Contract specific preferences for the Netting Agreement(s) selected
Contract specific preferences for the Collateral Agreement selected
Contract preferences for Collateral and Netting if there are no existing agreements
List of securities eligible as collateral for the contract, if collateral is applicable and there are no existing agreements

Click the Collateral-Netting button at the bottom of the contract screen to open this screen.

Figure 3-2 Collateral-Netting

Description of "Figure 3-2 Collateral-Netting"

The following table describes the fields captured for Collateral-Netting preferences for a Contract.

* Indicates mandatory fields.

Table 3-2 Collateral-Netting

Field	Description
Module	Displays Treasury Module of the contract.
User Reference	Displays User Reference number of the Contract for which the Collateral-Netting preferences are being captured.
Version	Displays current Version of the contract.
Deal Product	Displays the Product selected for the contract.
Portfolio	Displays the Portfolio selected for the contract. Applicable only for the contracts booked in the modules, in which portfolios can be defined separately. These modules are Securities, Credit Derivatives and Exchange Traded Derivatives
Portfolio Customer	Displays Customer of the Portfolio selected for the contract, if applicable. Not applicable for contracts booked in bank’s own portfolio
Collateral Party	Displays the Party with whom the collateral is exchanged for the contract, as selected in the Linked Entities sub system.
Netting Party	Displays the Party with whom the main components of the contract is net settled, as selected in the Linked Entities sub system.
Contract Currency	Displays the Currency selected for the contract. For contracts where a currency pair or multiple currencies are selected, base currency selected for the contract is considered as the contract currency
Use Collateral Agreement	Indicate whether the contract use an existing agreement with the collateral party, for Collateral Margining.
Use Netting Agreement(s)	Indicate whether the contract use an existing agreements with the contract parties, for Settlement Netting.
Deal Type	Select the standard Deal Type applicable for the contract This field cannot be amended after first authorization of the contract Can be one of the standard deal types maintained using ‘Treasury Static Type Maintenance’ function with type as 'DEAL_TYPE’, applicable for the module and product type of the contract Defaulted based on the module and product type, however the user can change before authorization Deal type selected is used for grouping contracts during Netting and Reporting
Std. Tenor	Select the Standard Tenor applicable for the contract This field cannot be amended after first authorization of the contract Can be one of the standard tenors maintained using ‘Treasury Static Type Maintenance’ function with type as ‘RISK_TENOR’, applicable for the module of the contract and deal type selected Defaulted based on the module and deal type, however the user can change before authorization Tenor selected is used for grouping contracts during Netting and Reporting
Lendable Margin (%)	Enter the% of margin applicable for the contract. Applicable only if collateral is applicable for the contract and when ‘Calculate Amount’ is unchecked Defaulted to 0%, if not entered
Calculate Amount	Indicate whether Contract Amount (borrowed/lent) is calculated based on the value of the collateral provided by applying the margin% entered. Applicable only if collateral is applicable for the contract If this field is checked, then calculate and set Contract Amount = Collateral Value / (1+Margin%) If this field is unchecked, then calculate and set Lendable Margin (%) = (Collateral Value - Contract Amount) *100 / Contract Amount
Risk Type	Select the Risk Type for the contract, if applicable Can be one of the standard risk types maintained using ‘Treasury Static Type Maintenance’ function with type as ‘CRIF_RISK_TYPE’, applicable for the module of the contract Risk type selected is used for grouping contracts for Risk calculation purposes
Risk Bucket	Select the Risk Bucket for the contract, if applicable Can be one of the standard risk buckets maintained using ‘Treasury Static Type Maintenance’ function with type as ‘CRIF_RISK_BUCKET’, applicable for the risk type selected Risk bucket selected is used for grouping contracts for Risk calculation purposes
Assign Collateral Later	Indicate whether collateral details is captured during deal booking or later. If this field is unchecked, then collateral details should be mandatorily captured in Repo / Reverse Repo tabs, while booking the contract If this field is checked, then collateral details need not be captured in Repo / Reverse Repo tabs, while booking the contract However, collateral details need to be captured before initiation of the contract using ‘Collateral Assignment Process (SRDMRONL)’ function

Parent topic: Collateral and Netting Preferences for the Contract