4 Processing Collateral Margin

This chapter explains processing Collateral Margin transfer in Oracle Banking Treasury Management application.

Collateral Margin can be assigned and exchanged with the counterparty for different purposes, at different stages during the life cycle of a contract and from different functions in Oracle Banking Treasury Management application.

• Collateral can be assigned for the purpose of
• Initial Margin while taking a position
• as an Independent Amount for additional collateral
• as Variation Margin to compensate for changes in the value of the collateral due to Marking to Market or
• for funding as required before taking a position or for initiating settlement
• Collateral can be exchanged with any party eligible for collateral including,
• Counterparty of the contract
• Exchange or Execution Broker through which a position is taken
• Clearing House or CCP or Clearing Broker through whom a trade is cleared and settled
• Custodian or Triparty Agent or any Third party intermediary designated for calculating and maintaining eligible collateral on behalf of the trading parties
• Collateral can be assigned during the life cycle of the contract
• for booking a new contract
• for margin calls due to change in the value of collateral or position while Marking to Market
• for substituting or replacing the collateral given earlier with another collateral of same or different type
• for returning the collateral during Maturity or Liquidation of the contract
• for returning and reassigning of collateral every day for DBV contracts
• Collateral margin processing can be performed from the functions
• used for contract booking while booking contracts
• used specifically for collateral assignment, substitution and margin calls processing
• used for manual payments and liquidation of contracts, for returning the collaterals received
• can be automatically triggered when the contract is initiated, liquidated or rolled over through a batch process - during the day, End of Day or Beginning of the Day

This topic contains the following sub-topics:

• Collateral Assignment
  This topic describes the collateral assignment process for different collateral types.
• Process to initiate a new transaction
  This topic provides the systematic instructions to initiate a new transaction.
• Process to view the details of an existing transaction
  This topic provides the systematic instructions to view the details of an existing transaction.
• Modifying an existing transaction
  This topic provides the systematic instructions to modify an existing transaction.
• Discard, reverse and print transactions
  This topic provides the systematic instructions to discard and reverse transactions and print details of the transactions.
• Collateral Assignment Process screen
  This topic describes how the user can initiate collateral assignment and transfer for an agreement or a contract in this Collateral Assignment Process screen.
• Main Criteria