33.2 Defining a Transaction Strategy

To define a Transaction Rule, follow these steps:

1. To add a new transaction or instrument record to the Rule, click Add. A new row appears in the Product and Currency selection pane.

   To delete a transaction or instrument record, check the box next to the product you want to delete and then click Delete.

2. After you add a new transaction row, navigate to Product column.
3. Click Selector icon to open the Hierarchy Browser and select a product leaf member. The currency code defaults to the currency defined in Application Preferences. For more information, see the Application Preferences section.
4. After adding the product and selecting appropriate product dimension member from the HierarchyBrowser to define the attributes for the transaction.
5. Based on the Product Members – Account Type attribute, you will be directed to either an On-Balance Sheet Attribute window or an Off-Balance SheetAttribute window.

On-Balance Sheet Attributes

The On-Balance Sheet Attribute window has following four tabs to define the strategy Rule for On-Balance Sheet transactions (non-derivative).

The last two bullets are optional based upon the product type definition in the first and second bullet.

• Define Core Product Attributes
• Define Payment Attributes
• Define Adjustable Rate Attributes
• Define Negative Amortization Attributes
• Define Other Mortgage Attributes*
• Define Inflation Adjustment Attributes**
• Define Tiered Interest Rate Attributes***

Note:

** This tab is displayed, if the Inflation Indexed Instrument option is selected on Define Core Products Attributes tab for New Business.

*** This tab is available if Adjustable Type is selected as Tiered Balance Interest Rate on Define Core Products Attributes tab.

Embedded Option Flag and Inflation Indexed Instrument flags cannot be selected together. If both are selected, then an error message is displayed “Indexed Instrument does not support Embedded Option. Do you want to continue?”.

Off-Balance Sheet Attributes

The Off-Balance Sheet Attribute window has following two tabs to define the strategy Rule for Off-Balance Sheet transactions.

• Define Core Product Attributes
• Define Leg Level Attributes: The Leg Attributes are separated into two subtabs:
  • Receiving Leg/IR CAP
  • Paying Leg/IR Floor

The values are populated with the default settings from the corresponding leaf member in the selected Product Characteristics Rule. You can modify them as required.

You can add as many transactions for any leaf member.

New Business in Bonds with Embedded Options is supported through the Transaction strategy. In the Define Core products Attributes tab of Transaction strategy definition, select the Embedded Option check box to define the Embedded Option new business rules.