3.1 Linked Entities for a Contract

This topic describes the linked the entities for a contract.

While capturing the details for a contract, user can select any number of customers as Linked Entities for the contract. These are the parties that play different roles during the life cycle processing of the contract. These parties can be,

• the Actual customer with whom the contract was agreed, if the party selected as counterparty in the contract details is different for any specific reason
• a Trading or Execution Venue, in which the contract was executed
• a Clearing House, CCP or a Clearing broker, through whom the contract is cleared for the bank
• any Intermediary who is involved in the arrangement, execution or clearing of the contract
• any Intermediary who is involved in reporting or recording the contract for regulatory purposes

If Linked Entities for an existing contract are amended, the new value for the field amended is used only for the subsequent operations and events on this contract and will not be applied on the past events automatically. Any adjustments to the past events should be operationally handled.

Click the Linked Entities button at the bottom of the contract screen to open this screen.

Figure 3-1 Linked Entities

Description of "Figure 3-1 Linked Entities"

The following table describes the fields captured for Linked Entities for a Contract.

* Indicates mandatory fields.

Table 3-1 Linked Entities

Field	Description
Branch	Displays the Branch in which contract is booked.
Counterparty	Displays Counterparty selected for the contract, in the main contract details. At least one of the main parties involved in ‘Execution’ or ‘Clearing’ should be same as the Counterparty
User Reference	Displays User Reference number of the Contract for which the Linked Entities are being captured.
Version	Displays current Version of the contract.
Module	Displays Treasury Module of the contract.
Portfolio Customer	Displays Customer of the Portfolio selected for the contract, if applicable. 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 Not applicable for contracts booked in bank’s own portfolio
Execution	Group of fields to capture the main parties involved in the execution of the contract.
Traded On	Select the type of the contract, based on where the contract is traded. This field cannot be amended after first authorization of the contract This field is set to ‘Execution Venue’ by default and disabled, if the module of the contract is ‘Exchange Traded Derivatives’ For other modules, ‘Over the Counter’ is set by default, but user can select ‘Execution Venue’ if applicable for the product
Original Customer	Select the actual customer for the contract, for/with whom this contract was executed. For contracts booked by an Agent for his Client, Counterparty can be the Agent with whom the contract is settled Original Customer can be the Client who is the final beneficiary For OTC contracts that are novated with a Clearing House/CCP, Counterparty can be the Clearing House/CCP through whom the contract is cleared and settled Original Customer can be the actual party with whom this contract is executed There can be other scenarios, where the Original Customer can be different from the Counterparty captured for the contract Counterparty selected for the contract is set by default All treasury customers are displayed for selection
Execution Broker	Select the broker, who executes the contract on behalf of the Bank, if applicable. Execution Broker selected can be a member of the Trading / Execution Venue in which the contract is executed a sub broker who executed the contract on behalf of the bank in the Trading / Execution Venue a sub broker, who arranged the OTC contract with the counterparty, etc. By default, this field is disabled and set to the ‘Broker’ selected in main details of the contract for all modules Broker should be selected in the ‘Main’ tab of the contract, if applicable and cannot be amended in the Linked Entities, except for ‘Exchange Traded Derivatives’ module If the contract module is ‘Exchange Traded Derivatives’, Execution Broker can be selected in Linked Entities, if applicable But this field cannot be amended after the broker commission for the contract is liquidated for this broker Only those treasury customers having ‘Broker’ party role and having broker setup with ‘Execution Broker’ checked and enabled for the module of the contract is displayed for selection
Trading Venue	Select the venue through which the contract was executed, if applicable. This field cannot be amended after first authorization of the contract Mandatory for contracts with Traded on selected as ‘Execution Venue’ Can be selected for OTC contracts as well, if applicable Can be any party classified as Trading Venue according to MiFID regulation Same as Execution Venue, if executed directly in a Regulated Exchange Can be a Multilateral Trading Facility (MTF), Organized Trading Facility (OTF), Systematic Internaliser (SI), etc. Only those treasury customers having ‘Trading/Execution Venue’ party role is displayed for selection If not specified, then Execution Venue if selected is set to this field, for contracts with ‘Traded On’ selected as ‘Execution Venue’
Execution Venue	Select the Regulated Exchange in which the contract was finally executed, if applicable This field cannot be amended after first authorization of the contract Applicable and mandatory only for contracts with Traded on selected as ‘Execution Venue’ If the contract module is ‘Exchange Traded Derivatives’, by default this field is disabled and set to the exchange if defined for the instrument of the contract If exchange is not defined for the instrument, then this field is enabled, and user can select any execution venue Only those treasury customers having ‘Trading/Execution Venue’ party role is displayed for selection
Clearing	Group of fields to capture the main parties involved in the clearing of the contract.
To be Cleared	Indicate whether the contract is cleared through a Third party, if applicable. This field cannot be amended after first authorization of the contract Checked by default and disabled, for all contracts with Traded on selected as ‘Execution Venue’ Can be checked for OTC contracts if agreed to be cleared through a Third party
Clearing House/CCP	Select the Clearing House/CCP through which the contract is cleared, if applicable. This field cannot be amended after first authorization of the contract Applicable only for contracts with ‘To be Cleared’ checked Mandatory for contracts with Execution Venue selected Can be a designated Clearing House if the contract is traded on an Execution Venue Can be a Central Counter Party (CCP), International Central Securities Depositary (ICSD), Regional Custodian or any Third Party as agreed with the counterparty, for OTC contracts If the contract module is ‘Exchange Traded Derivatives’, by default this field is disabled and set to the clearing house if defined for the instrument of the contract If clearing house is not defined for the instrument, then this field is enabled, and user can select any clearing house or CCP Only those treasury customers having ‘Clearing House/CCP’ party role is displayed for selection
Clearing Member/Broker	Select the broker, who clears the contract on behalf of the Bank, if applicable. Applicable only for contracts with ‘To be Cleared’ checked Mandatory for contracts for which Clearing House/CCP is not selected, but ‘To be Cleared’ is checked Clearing Broker selected can be a member of the Clearing House/CCP through which the contract is cleared, etc. Can be same as the Execution Broker By default, this field is disabled and set to the ‘Broker’ selected in main details of the contract, if the module of the contract is ‘Exchange Traded Derivatives’ Broker should be selected in the ‘Main’ tab of the contract and cannot be amended in the Linked Entities For contracts in other modules, Clearing Broker can be selected in Linked Entities, if applicable But this field cannot be amended after the broker commission for the contract is liquidated for this broker Only those treasury customers having ‘Broker’ party role and having broker setup with ‘Clearing Broker’ checked and enabled for the module of the contract is displayed for selection
Netting Required	Indicate whether any components of the contract is Net settled with other contracts, if applicable. This field cannot be amended after first authorization of the contract Checked by default, for all contracts with ‘To be Cleared’ checked but user can uncheck Netting Required if not applicable for these contracts
Netting Party	Select the party with whom the main components of the contract is net settled. Applicable and mandatory only for contracts with ‘Netting Required’ checked Only one party with whom the main components are to be settled can be selected as netting party for the contract, though netting for different components can be with different parties/intermediaries selected for the contract If the contract module is ‘Foreign Exchange’, by default this field is set to the ‘FX Netting Customer’ if defined for the counterparty of the contract Otherwise, user can select any one of the Original Customer, Execution Broker, Trading Venue, Clearing House/CCP, Clearing Broker or any other intermediary selected with ‘Netting’ checked
Collateral	Group of fields to capture the main parties involved in exchanging collateral for the contract.
Tri/Third-Party	Indicate whether a Triparty Agent or a Third-Party is used for holding the collateral for the contract.
Triparty Agent/Custodian	Select the Triparty Agent or Third-Party custodian, if applicable, who is holding the collateral for the contract. Applicable and mandatory only for contracts with ‘Tri/Third-Party’ checked Can be same as Clearing House / CCP or Clearing Broker, if the same party holds the collateral on behalf of the bank and the counterparty Can be an International Central Securities Depositary (ICSD), Regional Custodian or any Third Party as agreed with the counterparty, for OTC contracts Only those treasury customers having ‘Triparty Agent/Custodian’ party role and having SKL setup is displayed for selection
Collateral Required	Indicate whether collateral is exchanged for this contract, if applicable. This field cannot be amended after first authorization of the contract Checked by default and disabled, for all contracts with ‘Tri/Third-Party’ checked Checked by default, for all contracts with ‘To be Cleared’ checked but user can uncheck Collateral Required if collateral is not applicable for these contracts Collateral Required can be checked for any contract if agreed with the counterparty, even if ‘Tri/Third-Party’ and ‘To be Cleared’ are unchecked
Collateral Party	Select the Party with whom the collateral is exchanged for the contract. Applicable and mandatory only for contracts with ‘Collateral Required’ checked Only one party can be selected as collateral party for the contract Disabled and set to Triparty Agent/Custodian selected, for those contracts with ‘Tri/Third-Party’ checked Disabled and set to the Intermediary selected with ‘Collateral’ checked Otherwise, user can select any one of the Original Customer, Trading Venue, Clearing House/CCP or Clearing Broker for the contract as Collateral Party If the collateral party is amended for the contract, all subsequent events for collateral margining process for the contract is triggered with the new collateral party selected Returning any collateral with the pervious collateral party should be operationally handled
Pledgor / Receiver	Indicate whether the Bank is the Collateral Provider (Pledgor) or Receiver for the contract. Applicable and mandatory only for contracts with ‘Collateral Required’ checked This field cannot be amended after first authorization of the contract Set to ‘Pledgor’ by default and disabled, if Execution Venue is selected for the contract Set to ‘Pledgor’ by default and disabled, if the module is ‘Securities Repo’ and the product type is ‘Borrowing’ for the contract Set to ‘Receiver’ by default and disabled, if the module is ‘Securities Repo’ and the product type is ‘Lending’ for the contract For other modules, user can select ‘Pledgor’ or ‘Receiver’ If not specified, ‘Pledgor’ is set by default
Intermediaries	Group of fields to capture the other intermediaries involved in processing the contract. Intermediaries selected cannot be deleted, if any component is already settled or any contract event is already processed using the intermediary
Customer	Select any other Intermediary linked to the contract. This field cannot be amended after first authorization of the contract Multiple Intermediaries can be selected for the contract All treasury customers are displayed for selection Party selected as one of the main parties can also be selected as an Intermediary, if they play multiple roles for the same contract But same party cannot be selected multiple times with the same relationship
Description	Displays description of the Customer selected.
Relationship	Select the role played by this Intermediary for the contract. This field cannot be amended after first authorization of the contract Use can select one of the Standard relationships maintained using ‘Relationships’ function Example: Sub Broker, Sub Custodian, Agent Lender, etc. Only those relationships that are not selected for the same intermediary are displayed for selection Cannot be one of the main relationships namely Original Customer, Execution Broker, Trading Venue, Execution Venue, Clearing House/CCP, Clearing Broker, Triparty Agent, Custodian
Execution	Indicate whether this Intermediary is involved in the execution of the contract. Can be checked for any number of intermediaries selected This field is checked by default, if the Relationship selected is ‘Sub Broker’ and a broker setup enabled for the module of the contract with ‘Execution Broker’ checked is available for the selected intermediary
Clearing	Indicate whether this Intermediary is involved in the clearing the contract. Can be checked for any number of intermediaries selected This field is checked by default, if the Relationship selected is ‘Sub Broker’ and a broker setup enabled for the module of the contract with ‘Execution Broker’ unchecked is available for the selected intermediary
Brokerage / Charge	Indicate whether Brokerage or any other Charges are to be paid to this Intermediary. Can be checked for any number of intermediaries
Collateral	Indicate whether collateral is exchanged with this Intermediary for this contract. Can be checked for only one of the Intermediaries selected This intermediary is set as the ‘Collateral Party’ for the contract
Netting	Indicate whether netting is applicable for the components to be settled with this intermediary. Can be checked for any number of intermediaries selected