5.1.8 Pre-Netting for Deal Cashflows

User can select the list of Cashflow Components to be net settled for the deals linked to the selected Scheme and Agreement or Portfolio.

The details that can be captured for Deal Cashflows pre-netting include,

• Module, Agreement or Portfolio and Deal Product for which pre-netting is initiated
• Component type, Component, Currency, and Due date of the Cashflows to be netted
• Tenor and Netting Type for calculating the net amount
• Settlement Amount to be transferred after netting the cashflows

User can view the details for,

• Net Amount calculated for the component
• Exchange rate to be used when Cashflow currency is different from the Settlement Currency
• Transfer Amount and Transfer Action as Pay or Receive

On click of Load All Accounts button, all cashflow Components marked for net settled for the deals linked to the selected Scheme and Agreement or Portfolio are automatically identified. The details for the net amount to be settled would be automatically populated in Deal Cashflows tab.

• User can choose to remove the Components for which pre-netting need not be initiated as part of this transaction
• Can edit the Settlement Amount for each record

Click the Deal Cashflows tab of the Cash-Margin Netting Initiation Process (MGDCMINI) function to open this screen.

Figure 5-6 Cash-Margin Netting Initiation Process - Deal Cashflows

The following table describes the fields captured for initiating pre-netting transaction for Deal Cashflows.

* Indicates mandatory fields.

Table 5-6 Cash-Margin Netting Initiation Process – Deal Cashflows

Field	Description
Module	Displays the module of the deal(s) for which pre-netting of cashflows are initiated. Same as the Module (if) selected in the header This field cannot be amended after saving the pre-netting transaction
Agreement/Portfolio	Displays the Agreement or Portfolio for which pre-netting is initiated for the components to be netted for the deals linked. Same as the Agreement or Portfolio (if) selected in the header This field cannot be amended after saving the pre-netting transaction Only those active Agreements with the selected party, available for the current branch, enabled for the Module and having Expiry Date >= Process date of the pre-netting, is displayed for selection Only those active portfolios for the Module, available for the current branch and customer portfolios for the selected Party (if available), is displayed for selection Applicable only for Securities, Exchange Traded Derivatives and Credit Derivatives modules in which portfolios can be defined separately
Cashflow CCY	Displays the currency of the Cashflows netted. Example: Cashflow CCY = ‘USD’ Only those cashflows in the same Currency can be netted together
Netting Deal Type	Displays the Deal Type for which pre-netting is initiated for the deals linked to the selected Agreement or Portfolio. Only those Deal Types configured for netting for the selected Agreement or Portfolio is displayed for selection Only those cashflows of deals having the same Deal type can be netted together
Product	Displays the Deal Products for which pre-netting is initiated for the deals linked to the selected Agreement or Portfolio. Only those Deal Products configured for netting for the selected Agreement or Portfolio is displayed for selection Only those cashflows of deals having the same Product can be netted together
Component Type	Displays the cashflow Component Type for which pre-netting is initiated for the deals linked to the selected Agreement or Portfolio. Only those Component Types configured for netting for the selected Agreement or Portfolio is displayed for selection Only those cashflows of the same Component Type can be netted together
Component	Displays the cashflow Component for which pre-netting is initiated for the net amount for the deals linked. Only those Components configured for netting for the selected Agreement or Portfolio is displayed for selection Only those cashflows of the same Component can be netted together
Flow Type	Indicates whether both cashflows paid and received are netted together or aggregated separately. Can be ‘Net’, implying that both cashflows paid and received are netted together Can be ‘Aggregate’, implying that cashflows paid are netted and cashflows received are netted separately, for the same component
Tenor	Indicates whether cashflows are netted across deals having different tenors or only same tenor.
Cashflow Due Date	Displays the maximum Due date of the cashflows netted together for the deals linked.
Net Amount	Displays the net cashflow amount calculated for the linked deals for the selected component and currency. Amount displayed is positive when the net amount is receivable by the bank Example: Net Amount = USD 258,150 Amount displayed is negative when the net amount is payable by the bank Example: Net Amount = USD -400,000
Settlement Amount	Enter the Settlement Amount, in Cashflow CCY, as agreed with the Counterparty, for the selected Component for the selected Agreement or Portfolio. Example: Settlement Amount = USD 258,000 Net Amount is set by default
Adjustment	Displays the amount to be adjusted after netting for the selected cashflow component for the linked deals. Displays the difference between the Settlement Amount and Net Amount, if they are different Example: Adjustment = Settlement Amount – Net Amount = 258,000 – 258,150 = USD - 150 Adjustment entries are posted to write back this amount against net payable or receivable calculated for the component
Fx Rate	Displays the exchange rate to be used when Cashflow CCY is different from the Settlement Currency of the Scheme. Example: If Cashflow ccy = ‘USD’ and Settlement currency = ‘GBP’, then Fx Rate = 0.79 When Cashflow CCY is same as the Settlement Currency, then Fx Rate = 1
Transfer Amount	Displays the Net Cashflow Amount to be transferred in Settlement Currency. Transfer Amount is displayed as an absolute value without sign When Cashflow CCY is different from the Settlement Currency, then Settlement Amount is converted to Transfer Amount using the Fx Rate Example: Transfer Amount = ABS(Settlement Amount) * Fx Rate = ABS(258,000) * 0.79 = GBP 203,820 When Cashflow CCY is same as the Settlement Currency, then Transfer Amount = Settlement Amount
Transfer Action	Displays the direction of the Net Cashflow Amount to be transferred. If the Settlement amount displayed is negative, then Transfer Action is set to ‘Pay’ Example: If Settlement Amount = -13,500 then Transfer Action = ‘Pay’ If the Settlement amount displayed is positive, then Transfer Action is set to ‘Receive’
User Comments	Enter any additional comments for the net cashflow transfer for the selected Component. A maximum of 100 characters can be entered
Netting ESN	Displays the accounting event sequence number for the accounting entries posted for the net cashflow transfer.

• View Linked Deals for Deal Cashflows