OTC Interest Rate Instruments
Use
You can use the functions for OTC interest rate instruments in the trading and back office area both for liquidity control in your company and to recognize, analyze and hedge against interest rate risks.
Prerequisites
Before using the transaction management functions, you have to enter master data.
You have to create your business partners , assign the corresponding roles to these partners and maintain the transaction authorizations. To process financial transactions, you must have defined the banks that are authorized as business partners in the system with the corresponding payment details.
You have to set up the standing instructions (correspondence, payment details) and release the business partner.
You also have to make the following settings in Customizing:
Define the product types (if you do not want to use one of the standard product types delivered with the system, you can define your own product types). You create financial transactions and manage positions on the basis of product types.
A discount FRA
one example of a product type.Define the transaction type. The transaction type determines the types of transactions that can be concluded with a particular product type. It also controls the transaction and position management process. Example:
Purchase
Define the flow type. Flow types describe the various changes to the cash flows. Example:
Cash settlement
You must assign the flow type to the transaction type.
Define the condition type. This setting controls which structural characteristics are displayed when transactions are created. Example:
Interest rate adjustment.
For more information, see the relevant section in the Implementation Guide.
You can then define financial transactions in the system.
Features
The product types for interest rate instruments are:
See also: