4.5 Product Code - FXNF

FXNF – NDF (FX NDF Deal)

Business Scenario

This financial product that is, NDF helps customers/corporate to Purchase/Sale the Banned Foreign Exchange Currencies at Forward (Future) Market.

Targeted Customer Segment: Inter Bank Clients who seek Cash Foreign Currency Buy/Sell

Introduction

NDF Forward Product FXNF is used for Buy/Sell of the trade restricted Foreign Exchange Currency for Future Date.

• Fixing Date- This is the day and time whereby the comparison between the NDF rate and the prevailing spot rate is made.
• NDF Currency- Currency in this settlement not done.

Synopsis (ex. High level features etc.)

• NDF Product is used for Purchase/Sale of Banned Foreign Exchange Currencies from Forward Market.
• NDF Forward Deal will be normally fixed 2 days prior to the Value date.
• NDF Forward settlement will happen for only net amount. Not the Deal amount.
• Customers of both type types that is, retail customers and corporate could be covered under this product.
• It may/may not involve insistence of Limit

Detailed Coverage

Product NDF covers the following features:

• Forward Date Booking of Deal
• Settlement Message
• Payment Settlement
• Settlements
  • Conventional
  • Continuous Linked Settlement

Events Covered (including brief information on accounting)

Product NDF has the Life Cycle as listed below:

Table 4-9 Events Covered

Events Covered	Terminology
BOOK	Contract Booking event triggers when Bank Initiate the Deal.
CONF	On Counterparty Confirmation this event will get triggered.
AMND	Contract Amendment event triggers on modifying a deal.
REAS	Reassign User event will get triggered on new User Assign.
SGEN	Settlement Message Generation
LIQD	Liquidation Event will get triggered on Manual/Auto Payment of the Deal
REVP	Payment Reversal is processed under this event
REVR	Contract Reversal is processed under this event
CANC	Deal Cancellation event will get triggered on cancellation of the deal.

Advices Supported

Following Below are the advices supported for the Cash Deal Product FXNF:

• Confirmation Advice Confirmation
• Contract Reversal
• Deal Slip
• Broker Confirmation

Messages

Following SWIFT Messages setup done in the IDRS product as part of product life cycle.

Table 4-10 SWIFT Messages

SWIFT Messages	Contact Field
MT 300	Confirmation, Amendment, Reverse
MT 304	T-Copy Settlement
MT 103/MT 202/MT 205	Payment Message
MT 192/ MT 292	Payment Reversal
MT 210	Receive Notice
MT 940/ MT 950	Account Statement

Generic Features

Cash Product FXNF features include:

• Forward dated Contract booking
• Fixing of the Deal
• Unfixing of the Deal
• Cross Currency Contract Booking
• Counterparty Confirmation
• Contract Re-assign
• Holiday period treatment
• Capturing of UDE values
• Liquidation of Contract – Auto / Manual

Special/Other Features

Other Features

Other Features of the Spot Product FFB1 are as below:

• Split Value Date
• Partial Liquidation of the Contract
• Partial Cancellation of Contract
• Currency/Pair Wise Netting - Auto / Manual
• Limit Tracking
• Deal Revaluation
• Option Date
• Multiple Options
• Extension
• CLS Status Change
• CLS Alleged Deal Status Change
• CLS Net Position Check
• CLS Status Change Alert