3.14.1 Overview of Add-on Rate Rules

Add-on Rate Rules allow users to define Add-on Rates that are assigned incrementally on top of base Funds Transfer Pricing Rate to Account for a variety of miscellaneous risks such as Liquidity Risk or Basis Risk, or to supplement Strategic Decision-Making with Pricing Incentives, Breakage Charges, or other types of Add-On Rates.

Within the Standard Transfer Pricing Process, users can select an appropriate Add-on Rate Rule to calculate Add-on Rates or Breakage Charges.

Add-on Rates can be a Fixed Rate, a Fixed Amount, or a Formula Based Rate. Breakage Charges can be a Fixed Percentage, a Fixed Amount or can also be calculated on an Economic Loss Basis. The Add-On Rates are calculated and output separately from the base Funds Transfer Pricing Rate, so they can be easily identified and reported. Additionally, Add-on Rate Rules allow you to apply event-based logic with Conditional Assumptions that are applied or varied only if a specific condition is satisfied.