20.18.2 Consolidated

When a parent legal entity is selected as Consolidated, all the exposures of that legal entity and exposure of each level (or levels) of descendant child legal entities (without intra-group exposures) are selected for processing. In intra-group exposures, the counterparty is a child descendant of any level. For an intra-group scenario (where the GL Structure has specific intra-group GL Code in addition to regular GL Codes), intra GL Codes are considered only from the GL side for processing. Non-Intra is a scenario where no GL Codes are present for reconciliation definition.

Figure 20-1 Consolidated Process Flow

In this case, LE 1 is the parent legal entity, LE2 and LE3 are the immediate child legal entities of LE1. Similarly, LE4 and LE5 are immediate child legal entities of LE2, but second-level descendant legal entities of LE1.

If you select LE2 (parent) for consolidated treatment, then exposure to LE 4, LE 5, and LE7 are considered as intra-group exposures.

Note:

The application only aggregates data on the PP side for a Consolidation reconciliation type; such aggregation is only to reconcile data and does not consider minority or majority holdings.

Intra-group exposures are identified by the customer reference ID in the Product Processor. For LE2, if the customer reference ID is LE4, LE5, and LE7, then these are considered as intra-group exposures. Exposures to LE3 or LE6 are not considered as intra-group exposures as they are not the child descendants of LE 2. If you select LE7 for consolidated treatment, then no exposures are considered as intra-group exposure as LE7 has no child legal entity.

Note:

Intra-group exposures are identified by the customer reference ID in the PP Table.