1.4 Settlement Netting Scheme

This topic provides systematic instruction to settlement netting scheme.

Netting Schemes could be defined for a settlement party with internal preferences for Settlement Netting using Settlement Netting Scheme maintenance. These preferences defined for a settlement party and a settlement currency would be applied by default for all net settlement transactions using the netting scheme.

The details that can be captured for Settlement Netting Scheme include:

• A unique code and a brief description for the Scheme.
• Settlement Party and Settlement Currency for which this scheme can be used.
• Netting and Settlement parameters that would be applied for net settlement.
• Holiday calendars applicable for validating settlement date.

Netting Schemes are defined for a branch, counterparty.

• All the modifications to the scheme configuration would be logged for audit trail purposes.
• Auto authorization could be enabled for this function.

1. On the Home screen, type NTDSNSHM in the text box, and click Next.
   The Settlement Netting Scheme screen displays.

   Figure 1-4 Settlement Netting Scheme

   
   

   
   Description of "Figure 1-4 Settlement Netting Scheme"

   
   
2. On the Settlement Netting Scheme screen, Click New.
3. On the Settlement Netting Scheme, Specify the details as required.

   Table 1-4 Settlement Netting Scheme - Field Description

   Field	Description
   Netting Scheme Code	Specify the unique code that identifies this Netting Scheme throughout Treasury application.
   Scheme Description	Enter the suitable description for the scheme, preferably unique description to identify easily. This description is displayed along with the code.
   Settlement Party	Select the counterparty to this netting scheme.
   Settlement Currency	Select the settlement currency for which this Netting Scheme would be used.
   Remarks	Enter the notes about the product intended for bank’s internal reference.
   Net Pay-Receive	Switch this toggle On, to indicates whether netting of payments and receipts is allowed when this Netting Scheme is used for settlement.
   Netting Across	The drop-down lists the level up to which netting of cashflows is allowed when this Netting Scheme is used for settlement. The available options are: Module Product Deal Type Deal
   FX Netting Type	Specify whether netting of FX cashflows across currency pairs is allowed when this Netting Scheme is used for settlement.
   Allow Split Settlement	Switch this toggle On, to indicates whether split settlement is allowed when this Netting scheme is used for settlement.
   Automatic Netting	Switch this toggle On, to indicates whether cashflows can be automatically netted for deals using this Netting scheme.
   Netting Eligible	Switch this toggle On, to indicates whether this product can be used for net settlement.
   Settlement Product	Select the treasury settlement product that will be referred for triggering events and accounting for the payment using this netting scheme.
   Generate Messages	Switch this toggle On, to indicate whether settlement advice would be allowed to be generated when this Netting scheme is used for payment.
   Settlement Product	Select the treasury settlement product that will be referred for triggering events and accounting for the receipt using this netting scheme.
   Generate Messages	Switch this toggle On, to indicate whether settlement advice would be allowed to be generated when this Netting scheme is used for receipt.
   Verify Funds	Select the type for balance in the settlement account need to be verified before allowing authorization of the settlement using this product. The available options are: Not Required Verify but Proceed Verify and Stop