Nominal Adjustment for Perc.-Quoted Securities 

Purpose

After the changeover, you need to carry out a nominal adjustment for each individual securities account position.

Prerequisites

Background

As part of the issue currency changeover to the euro, the positions of bonds that are already on the market need to be converted.

Representation in the SAP R/3 System

In the Securities component, position management is based on flows rather than positions. Thus, when you change over to the euro, the system does not convert the security position using the fixed rate.

Instead, the system converts the position currency amount of all the flows that belong to the corresponding position. After the position changeover to the euro, there are likely to be minor differences between the nominal amount disclosed by the depository bank and the nominal amount calculated by the R/3 System, regardless of whether the issue was converted using the bottom-up or the top-down method. You eliminate these differences by adjusting the data in the SAP R/3 System to correspond to the data of the financial institution.

 Before the issue currency changeover, the position data is as follows:

Issue currency: DEM

Flows:

  1. Purchase 100,000 DEM (nominal amount)
  2. Sale 53,000 DEM
  3. Sale 33,000 DEM

® System position 14,000 DEM = Bank position

After the issue currency changeover DEM ® EUR:

(Translation ratio 0.493125)
  1. Purchase 49,312.50 EUR
  2. Sale 26,135.63 EUR
  3. Sale 16,273.13 EUR

® System position 6,903.74 EUR

Bank position 14,000 DEM * 0.493125 EUR/DEM

= 6,903.75 EUR

The difference is added to the most recent sale. The nominal sale amount is reduced by 0.01 EUR to 16,273.12 EUR. In this way, the system position is adjusted to the bank position of 6,903.75 EUR.

Eliminating the differences

Procedure

1. For each company code and securities account, determine the bank position (in euros) for a converted security on the conversion key date.

2. Start report program RFVWEUR3. Enter the Company code, the ID number, the Securities account and the Key date for the adjustment.

3. The system displays the nominal amount for the corresponding position.

4. Enter the securities account position according to your bank.

5. The system calculates the difference between the bank and system positions. Make sure that the difference can be explained by rounding differences (a maximum of a few euros). If the differences are greater, you need to clarify whether the differences resulted from the currency changeover or whether there are possibly other causes.

6. Choose Save.

The system adjusts the nominal amount of the existing flow by the difference calculated.

The system selects the most recent inflow or outflow before the key date as the flow to be modified (the relevant date is the position value date). Discounted securities (zero bonds) that are valued on an individual basis are an exception. For these securities, the system brings up all the inflows that fall before the value date, and you choose the record to be adjusted manually.

After the changeover to the euro, the smallest unit for a posted securities account position will be 0,01 EUR (1 cent method), and amounts will be rounded to the nearest two decimal places. This applies to most of the European exchanges.

In exceptional cases (such as in France), the nominal values are to be expressed without decimal places (1 euro method). The difference is settled by means of a cash settlement, which is represented in the system by a corresponding purchase/sale item.