4.7.5 Cash Collateral Assignment

Cash Collateral can be transferred using Collateral Assignment Process function.

• This function is used for stand-alone cash margin transfer for the selected Agreement, Portfolio or Contract
• Applicable only when Cash Collateral is allowed for the selected Agreement, Portfolio or Contract

The details that can be captured for processing Cash Collateral Assignment include,

• Margin currency, Margin Account, Margin amount to be transferred and whether it is paid or received by the bank
• Can indicate whether the cash transferred as collateral should be net settled with other cash components to be settled with the same party
• If netting is applicable, can capture the Settlement scheme for netting, settlement amount and FX rate used for converting the margin amount in margin currency to Settlement amount in settlement currency
• Settlement details (SSI) to be used for funds transfer, as agreed with the collateral party

User can view the details for,

• Margin Account currency and branch
• Margin calculated and the current balance in the Margin account

Click the Cash tab of the Collateral Assignment Process (SRDMRONL) function to initiate cash collateral assignment

Figure 4-6 Collateral Assignment Process - Cash

The following table describes the fields captured to initiate a Cash Collateral Assignment.

* Indicates mandatory fields.

Table 4-5 Collateral Assignment Process - Cash

Field	Description
Margin Currency	Displays the currency in which the margin required is calculated for the Agreement or Portfolio or Contract selected for Collateral Assignment, for the selected Margin Type. Displays the Portfolio Currency or Contract Currency by default, if no margin calculation rule is defined for the selected Portfolio or Contract
Margin Calculated	Displays the maximum cash Margin calculated in Margin Currency, for the exposure determined as of the Process Date, for the Agreement or Portfolio or Contract selected for Collateral Assignment, for the selected Margin Type. Example: Margin Calculated = USD 34,212.50 Applicable, only if Margin Calculation is performed internally in OBTR Otherwise, this field is blank
Margin Account	Select the Margin Account to which the cash margin is transferred, for the selected Margin Type. This field is mandatory for cash collateral assignment transaction This field cannot be amended after saving the collateral assignment transaction Only those Margin Accounts configured for the selected Margin Type and Agreement or Portfolio or Contract is displayed for selection
Account Branch	Displays the branch to which the selected Margin Account belongs to. Can be different from the branch to which the user has logged in
Account Balance	Displays the current balance in the Margin Account before this collateral assignment transaction. Amount displayed is positive when the account has a Debit balance, implying that the bank has deposited the margin with the collateral party Example: Margin Balance (Dr) = USD 38,000 Amount displayed is negative when the account has a Credit balance, implying that the collateral party has deposited the margin with the bank Example: Margin Balance (Cr) = USD -16,000 click on ‘Refresh Balance’ button to update the current balance displayed
Settlement Details	Group of fields to capture the details for cash margin amount to be settled.
Account Currency	Displays the currency of the selected Margin Account. Example: Account CCY = ‘USD’
Margin Transferred	Enter the Margin Call amount in Account CCY to be transferred as of the Settlement Date, for the selected Margin Type. This field is mandatory for cash collateral assignment transaction Displays the absolute value of the difference between the Margin Calculated and Account Balance, by default Example: Margin Transferred = ABS(Account Balance - Margin Calculated) = ABS(38,000 - 34,212.50) = USD 3,787.50 However, User can edit the amount for margin transferred if required to match the margin call amount agreed with the collateral party This field cannot be modified after first authorization of the collateral assignment transaction
Pay / Receive	Select the direction of the Margin Call to be transferred. This field is mandatory for cash collateral assignment transaction Based on sign of the difference between the Margin Calculated and Account Balance Set to ‘Pay’, if Account Balance > Margin Calculated Set to ‘Receive’, if Account Balance < Margin Calculated Example: When Account Balance = 38,000 and Margin Calculated = 34,212.50, then Pay / Receive is set to ‘Receive’ However, User can select ‘Pay’ or ‘Receive’ based on the margin amount transferred as agreed with the collateral party This field cannot be modified after first authorization of the collateral assignment transaction
Net Cash	Indicate whether the cash margin transferred should be net settled with other cash components to be settled with the same party. If checked, then cash margin transferred would be marked for net settlement Margin Account is debited / credited against the Scheme GL configured for the settlement scheme If checked, then cash margin transferred is settled individually Margin Account is debited / credited against the Nostro account configured for the SSI selected This field cannot be modified after first authorization of the collateral assignment transaction By default, displays the preference defined for the selected Margin Type and Agreement or Portfolio or Contract
Settlement Scheme	Select the Settlement Scheme for which pre-netting is initiated. Applicable and mandatory, only if ‘Net Cash’ is checked Only those active schemes with the selected party and available for the current branch, is displayed for selection This field cannot be modified after first authorization of the collateral assignment transaction
Settlement Currency	Displays the currency of the settlement scheme selected, in which the settlement happens. Set to Account Currency, if ‘Net Cash’ is unchecked
Settlement Amount	Displays the Margin Call amount to be transferred in Settlement Currency. This field is mandatory for cash collateral assignment transaction When Account Currency is different from the Settlement Currency, then Margin Transferred is converted to Settlement Amount using the Fx Rate Example: Settlement Amount = Margin Transferred * Fx Rate = 3,787.50 * 0.79 = GBP 2,992.13 When Account Currency is same as the Settlement Currency, then Settlement Amount = Margin Transferred
Fx Rate	Enter the exchange rate to be used when Account Currency is different from the Settlement Currency of the Scheme. This field is mandatory for cash collateral assignment transaction Example: If Account currency = ‘USD’ and Settlement currency = ‘GBP’, then Fx Rate = 0.79 When Account currency is same as the Settlement Currency, then Fx Rate = 1 This field cannot be modified after first authorization of the collateral assignment transaction

Click the Refresh Balance button to update the Cash tab’s current margin account balance automatically.