12.1 Creating Behavior Patterns

Depending on the Transfer Pricing method, the Behavior Pattern mapped to the individual instrument records (amrt_type_cd), may or may not be used. For cash flow TP methods, the engine will read the Behavior Pattern from the instrument record. For Tractor, Caterpillar and Weighted Average Perpetual methods, the Behavior Pattern is assigned directly within the TP Rule at a Product / Currency level and hence, the TP engine will not refer to the Behavior Pattern assigned to the individual instrument records for these methods.

You create Behavior Patterns to capture the principal run-off behavior of product types that do not have contractual maturities.

To create a Behavior Pattern, perform the following:

1. Navigate to the Behavior Pattern Summary Page.
2. Click Add to display the Behavior Pattern Details Page.

   Figure 12-1 Behavior Patterns Details Page

   
   

   

   
   
3. Enter a unique Numeric Code for the new Behavior Pattern. The code is must be mapped the appropriate instrument record’s AMRT_TYPE_CD and BEHAVIOUR_PATTERN_CD to connect the instrument to the appropriate pattern.

   Note:

   The code, also known as an amortization type code, is a numeric identifier for the behavior pattern. The code value must be a number between 70000 and 99999. The code value you assign to the new pattern must be unique. In addition, the code must be mapped to the appropriate instrument records, (AMRT_TYPE_CD field) to connect the instrument to the appropriate pattern.
4. Enter the Name and a Description for the pattern.
5. Select the Behavior Pattern Type from the following options:
   • Non Maturity
   • Non-Performing
   • Devolvement and Recovery.

   Note:

   The Replicating Portfolio option is enabled only for the Non Maturity Behavior Pattern. This option should be selected only when defining a Behavior Pattern for use in Funds Transfer Pricing – Tractor TP Method. Replicating Portfolio Behavior Pattern codes should not be mapped to instrument records (amrt_type_cd) and will not be available for selection in any UI other than Tractor TP Method.
6. Define the Behavior Pattern Tenor Specifications for the Maturity Branches.
7. The selection of the Behavior Pattern Type made in the previous step determines the information you must provide to successfully define that Pattern Type. For more information, see:
   • Defining Non-Maturity Behavior Patterns
   • Defining Non-Performing Behavior Patterns
   • Defining Devolvement and Recovery Behavior Patterns

Note:

The Behavior Pattern Details Page above displays the specifications associated with the Non Maturity Pattern Type. Should you change this value for one of the other two alternatives, Non Performing or Devolvement and Recovery, the payment specifications section corresponding to the new Pattern Type get refreshed. Although you can change your selection of the Pattern Type at any point in this procedure, sometimes this might result in loss of data related to any prior selection.