21.4.1 Defining Tractor Methodology

The prerequisites for defining a tractor methodology are:

• Creating a Non-Maturity Behavior Pattern with the Replicating Portfolio option enabled.
• Generating (and maintaining) the Portfolio. Volatile and Core Instrument strips will be created in the FSI_M_REP_PORTFOLIO_STRIPS table.

To define and use a tractor TP method:

1. Define the Transfer Pricing Rule and select the Tractor Method from the list of available TP Methods for relevant Product dimension members.
   (Optional) <Enter a step example.>
2. Select the appropriate Behavior Pattern.

   Note:

   The list will be limited to only those Behavior Patterns that are defined as Replicating Portfolios.
3. Select the Transfer Pricing Interest Rate Code.
4. Define a Transfer Pricing Process and Run using the TP Rule.
   • TP Process transfers price the non-zero portfolio strips using a straight term method.
   • TP Process computes a weighted average TP rate for the portfolio and will update all instruments mapped through the TP rule to this method.