5 Processing Settlement Netting

This chapter explains processing Net Settlement of Cash and Securities in Oracle Banking Treasury Management application.

Bank can trade in listed derivative deals through multiple brokers and maintains multiple settlement accounts with each broker. Daily statement for each account is received from the Broker on the next business day. Back-office user verifys the statement and initiate the broker settlement process.

Collateral Margin to be transferred can be netted with other components to be settled with the same counterparty, based on the netting preferences applicable for the transaction. Settlement can be initiated for the net value as agreed with the party.

Net settlement of Cash or Securities can be performed across contracts belonging to,

• same or different modules, products or deal types
• same or different agreements or portfolios
• same or different components

Components can be marked for Netting from the functions used for,

• contract booking, manual payments and liquidation of contracts
• collateral assignment, substitution and margin calls processing

This topic has the following sub-topics:

• Cash-Margin Netting Initiation
  This topic describes the cash-margin netting initiation process to initiate a new transaction, query and view details of an existing transaction, modifying an existing transaction, discard, reverse, and print transactions.
• Cash-Margin Net Settlement
  This topic describes the cash-margin net settlement process such as initiate a new transaction, query and view transaction details, modify an existing transaction, cash-margin net settlement process, scheme balance summary and deal cashflows.
• Securities Netting
  This topic describes the net settlement of securities process such as securities nettling process and view the securities netting summary details.