5.6 NDF Forward Deal

This topic describes the NDF forward and fixing deal.

An NDF deal is booked as FX Forward Contract with all the NDF details maintained in it. The product for the NDF Forward Contract is Forward type with the NDF indicator is set to ‘True’.

When an NDF Forward Contract is booked, an advice (NDF_Conf_Advice) is generated through mail to inform the counterparty about the booking. When an NDF Fixing Contract is booked against the NDF Forward Contract, the fixing status of the NDF Forward Contract is marked as ‘Fixed’.

In case of the NDF Forward Deal, the settlement amount tags SETBOTAMT and SETSOLDAMT is replaced by NDF_PROFIT and NDF_LOSS respectively.

The following are the new events for the NDF Forward Contract:

• FIXG (Fixing) – It is processed for the NDF Forward Contract when the NDF Fixing Contract is booked against it. It will create an unauthorized version of the NDF Forward Contract with following details updated:
• NDF Related Reference Number changed to NDF Fixing Contract Reference Number
• Net Settlement Amount of the NDF Forward Contract
• Fixing Status as Fixed

• UFIX (Unfixing) – It is processed for the NDF Forward Contract to reverse all accounting entries on reversal of NDF Fixing Contract. It creates an unauthorized version of NDF forward contract with the following details updated:
• NDF Related Reference Number is set to NULL
• NDF Settlement amount is set to NULL
• Fixing status is set as Unfixed

The following operations are changed for an NDF Forward Contract:

• Amendment - This operation is not allowed for an NDF Forward Contract, if the fixing status is FIXED
• Rollover - This operation is not allowed for an NDF Forward Contract, if the fixing status is FIXED
• Liquidation – This operation is not allowed until the contract is FIXED and FIXG is authorized
• Other operations

Note:

If the maturity date is less than the current date, then the LIQD and SGEN event will be executed on authorization of FIXG event. Otherwise the liquidation will happen with the EOD batch.

The Liquidation event is changed for the NDF Forward Contract to use the net settlement amount and settle the amount between the NDF profit or loss account and the customer.

The SGEN event (Settlement message event generation) generates the payment message for the net amount only. SGEN event is fired after the NDF Forward Contract is marked as Fixed and FIXG is authorized.

• NDF Fixing Deal