1. Asset Liability Management User Guide
  2. Oracle Asset Liability Management Process
  3. Capturing Instrument Behavior for Non-standard Instruments
  4. Defining Behavior Patterns
  5. CFE Requirements and Functionality

8.9.1.1 CFE Requirements and Functionality

AMRT_TYPE_CD of the instrument table should contain the behavior pattern code.

Non-Performing Assets

Behavior Sub Type = Substandard, Doubtful, and Loss (from Behavior Pattern).

BEHAVIOR_SUB_TYPE_CD can be NULL when BEHAVIOR_TYPE_CD = 1 (Non-Maturity). When BEHAVIOR_TYPE_CD = 2 (Non-Performing), then value is expected in BEHAVIOR_SUB_TYPE_CD. All the Substandard, Doubtful, and Loss events of Behavior Pattern will be processed by the CFE. Any outstanding balance after all the Non-Performing events from the pattern definition are processed will be written off on the maturity date. No interest cash flows will be generated.

Next Payment Date: This must be after As of Date of the process run. Suggested to be the same as Maturity Date since no interest payment is expected to happen.

Maturity Date: This must be after As of Date of the process run. Write-off events will happen on the maturity date.

Compounding Basis, Accrual Basis, Remaining Number of Payments, Current Payments, Current Net Rate, Adjustable Type Code: Since, the interest cash flow will not be generated, these can be the default values. Interest cash flow is output for Earning Assets, Interest bearing Liabilities, Interest Income, and Interest Expense account types.

Non-Maturity

Behavior Sub Type = Core and Volatile (from Behavior Pattern).

Instrument records need not contain behavior subtype. The engine will generate the core Run-offs and volatile Run-offs based on the pattern definition. Interest cash flow is paid out on thepayment dates.

Original Term, Amortization Term, Maturity Date: The engine arrives at Maturity Date based on the highest tenor given in the pattern definition. It is suggested that the Original Term and Amortization Term be assigned 99 years for non-maturity accounts. If the engine calculated maturity date is less than the maturity date in the instrument record (as normally is the case), then the instrument matures on the calculated maturity date, and the remaining interest is paid out on the calculated maturity date (interest in arrears case). The Maturity Date is calculated by the engine by adding the longest non- maturity tenor to as of date.

Devolvement and Recovery

Behavior Sub Type = Sight Devolvement, Sight Recovery, Usance Devolvement, and Usance Recovery (from Behavior Pattern).

Instrument data should contain the behavior subtype as Sight (Code: 306) or Usance (Code: 305). The subtype code is used by the engine to generate the devolvement or recovery events.

  • If subtype =Sight and Devolvement Status is No (both from the instrument record), then all the Sight Devolvement events from the Behavior Pattern will be processed. Finally, all the Sight Recovery Events will be processed.
  • If subtype = Sight and Devolvement Status is Yes (both from the instrument record), then all the Sight Recovery events available in the Behavior Pattern will be processed.

Any unrecovered balances will be written off on the maturity date. Similarly, Usance events will be processed.

One Behavior pattern can contain a mix of Sight and Usance events, but the Engine will process the events based on the Behavior Type Code of the instrument. No interest cash flows will be generated.

Next Payment Date: This must be after As of Date of the process run. Suggested to be the same as Maturity Date since no interest payment is expected to happen.

Maturity Date: This must be after As of Date of the process run. Any outstanding balance after all the Recovery events from the pattern definition are processed will be written off on the maturity date.

Compounding Basis, Accrual Basis, Remaining Number of Payments, Current Payments,Current Net Rate, Adjustable Type Code: Since the interest cash flow will not be generated, these can be the default values.