2.17 Amend Securities Repo Transactions

This topic describes how to use the Securities Repo Value Dated Changes Input screen to authorize and amend the securities repo deal.

Once a SR contract is authorized, changes to this is done through the Securities Repo Value Dated Changes Input screen.

Value Dated Amendment

Any change to the terms of a SR deal, which affects its financial details and the accounting entries, is made through the Value Dated Changes function of Oracle Banking Treasury Management. Through this function, the user can make changes to authorized deals on any day before the Maturity Date of the deal. The changes to the terms of a deal notified through this function, take effect on a date referred to as the “Value Date”.

That is why the changes brought about by this function are called Value Dated Changes.

A Value Date could be:

• Today
• A date in the future
• A date in the past

Using the Value Dated Changes function, the user can make changes to the various components of a deal like the interest rate or amount. The user can also change the Maturity Date. In addition to changing the values in certain fields, the user can enter a value into a field, which was not used, when the Repo details was captured.

For example, the user may not have specified a fee at the time of deal input. Using the Value Dated Changes function, the user can specify the fee so that the fee entries are passed on the Value Date.

When the user make a value dated change, only the accrual entries is passed by the Value Dated Changes function. The Automatic Contract Update function passes all the other accounting entries. The Value Date is the date on which the changes that are going to be defined will take effect. This is a date earlier than today, today, or a date in the future. If the value date is a date in the past, it must not be beyond the following dates for any component:

• Last payment date
• Last schedule date

Also, a value date in the future cannot be beyond the Maturity Date of the deal. If it has to be beyond the Maturity Date of the deal, the user first must postpone the Maturity Date of the deal so that the proposed future value date falls before the new maturity date. Only after this change is authorized which the user can fix a value date in the future for the deal.

Change the Maturity Date

Enter the new Maturity Date on the screen. When the user change the Maturity Date of a deal:

• If the user has advanced the Maturity Date, the schedules falling due after the new Maturity Date is redefined to the Maturity Date.
• If the user has postponed the Maturity Date, the schedules that have not liquidated and which fall due before the new maturity Date is redefined to the new Maturity Date.
• The user has to authorize the change in Maturity Date, before the user redefine the schedules as per your new requirements, through the Contract Schedules screen.
• When the user extend the Maturity Date of a deal, the time code of the credit line to which the deal is linked must be beyond the new Maturity Date. If not, the system will seek an override.
• The new Maturity Date applies to the deal from the Value Date of the deal.

Make Changes in Interest

If the user want to make value dated changes in the interest rate, the rate code, the spread or the interest amount the user has to invoke the Contract Interest, Charge and Fee screen of the ICCB module through the Value Dated Changes screen. The user can make value dated changes only to the following components in the Contract ICCB screen: Interest Rate

Enter the new interest rate. However, the user will not be able to:

Change the interest rate if the user has defined zero-interest for the deal

• Rate Code: If a floating type of interest is defined, enter the new rate code.
• Spread: Enter the new spread here.
• Interest Amount: Enter the new interest amount.
• Acquired Interest: If the deal initiated when it was input, the interest amount that has been accrued is entered here. The amount is taken into account by the system during the next liquidation cycle. The user can make changes to the acquired interest through this screen.
• Waiver: The attributes of an interest component are defined for a product is applied to a deal involving the product. If for some reason the user do not want to apply the interest component for the deal the user are processing; the user can do so by checking this field. The interest is calculated, but it is applied on the deal.

Note:

For back valued changes in interest rate, the system will take corrective action. Accruals are redone till the last accrual date. Also, in case of a back valued change, the value date must not be beyond the last liquidation date.