2.23 Specify Rollover for a Product

This topic describes how to use the Mode of Rollover (Manual or Automatic) feature to specify whether deals involving the product is to be rolled over when defining the product.

If rollover has been allowed for a product, all the deals involving the product can, by default, be rolled over.

Note:

However, a deal involving such a product is rolled over only if it is not liquidated on its Maturity Date. Choose not to rollover a deal that involves a product with the rollover facility. The user can indicate this when processing the deal.

This topic contains the following:

Mode of Rollover (Manual or Automatic)

For a deal involving a product for which a rollover is allowed, the user must specify the mode of rollover - automatic or manual - during processing.

Impact of Liquidation Mode on Rollover

The mode of liquidation of a deal (automatic or manual) has the following impacts while executing the rollover:

Table 2-73 Mode of Liquidation of a Deal

Specification	Treatment
Auto liquidation and auto rollover	The old deal is liquidated and a new one initiated on the Maturity Date of the deal during the BOD (Beginning Of Day) run of the Automatic Contract Update function. If the Maturity Date falls on a holiday, then the liquidation and the rollover is processed as per your holiday handling specifications in the Branch Parameters screen. If the user specified (in the Branch Parameters screen) that processing has to be done today (the last working day before the holiday) for automatic events right up to the day before the next working day, the schedule falling on the holiday is liquidated during end of day processing on the last working day before the holiday. If the user specified that processing has to be done only up to the System Date (today), then only the events scheduled for today (the last working day before the holiday) is processed. The events falling on the holiday is processed on the immediate working day after the holiday, during the beginning of day processing
Auto liquidation (of principal) and manual rollover	The old deal is liquidated automatically on the Maturity Date. If the deal has to be rolled over, the rollover instructions must be specified for the deal before the Maturity Date. If the contract has not been liquidated because of lack of funds in the repayment account, the user can give rollover instructions even after the maturity date saying that the contract has to be rolled over as of the maturity date.
Manual liquidation (of principal)	Rollover has to be manual. The deal will not be liquidated by the Auto Liquidation function. The user can either liquidate it or specify that it has to be rolled over. This is specified at any time - before or after the Maturity Date of the deal, if the contract has not yet been liquidated.

If the user has defined that the deal be liquidated manually, the user cannot roll it over automatically. When a deal is rolled over or renewed for the interest, charge or fee components, it can assume the following attributes:

• Those of the product involving the deal being rolled over, or
• Those of the old deal itself

Specify this at the time of deal processing (of the old deal).

Roll over a Contract Manually

Rollover a deal manually through the Rollover Details screen.

If a deal has to be rolled over:

• The latest activity on the deal has to be authorized
• It must be past its maturity date; and
• It must not have been liquidated

Two activities take place when a deal is rolled over:

• The original deal is liquidated and
• A new deal is initiated

However, Reference Number of the renewed or rolled over deal is the same as that of the old deal.

Specify the Maturity Details

The Maturity Type, which the user has specified for the old deal, will apply to the deal being rolled over, by default. However, the user can change the Maturity Type through this screen. If the maturity type is to be changed, the user has to specify the new Maturity Type for the rolled over or renewed deal. It could be:

Table 2-74 Maturity Details

Maturity Type	Details
Fixed	This type of deal has a fixed Maturity Date. For a deal with a fixed maturity date, the user enter the changed date on which the deal needs to be liquidated.
Call	The Maturity Date is not fixed. The deal is liquidated anytime.
Notice	The deal is liquidated at a certain period of notice. The number of days of notice must be specified in this screen. This is only for information purposes. Whenever a report is generated on a notice type of deal, the notice days is mentioned on it. For a deal with notice type of maturity, the user has to enter the Maturity Date once the notice is issued to the counterparty (customer).

For a deal maturing at notice, enter the notice period (in days) in this field. This is only for information purposes. Whenever a report is generated on a notice type of deal, the notice days is mentioned on it. For a deal with notice type of maturity, the user has to enter the Maturity Date once the notice is issued to the counterparty (customer).