Object Links (SAP Library)

Object Links

Use

To document the fact that certain transactions or objects belong together, you can define links in the administrative data of a transaction. To do this, you use fields in which you assign your own reference terms or numbers, which you can use for later evaluations. Relationships between transactions, which result from processing activities such as rollovers or netting transactions, or parts of a transaction such as the spot and forward transaction of a currency swap, are automatically linked by the system.

In the transaction data screen, you can display the links for this transaction by choosing Environment ® Object Links. An overview appears with a Reference number, Reference name, Reference status and Business partner.

Features

Example

Examples of reference/object links:

Spot/Forward Transaction: Rollover/Premature Settlement

When you use the rollover or premature settlement functions, the system generates two single transactions that are linked by a reference/swap unit. One transaction offsets the forward exchange transaction originally entered (possibly with identical, opposite conditions to avoid rate gains/losses). The other transaction, a new one, allows the term to be adjusted using the amount data as default values. The two new transactions are linked to the original transaction.

The relationship of a swap to the original forward transaction is automatically documented by the assignment of the individual transactions to a common finance project with an identical project number. This project number is in the administrative data. This enables you to display this referencing between related transactions in the transaction data. The moment you want to change part of a swap the system displays a warning message to show that there is a second swap component.

With the outlined change in the transaction data, you can break down a forward exchange transaction into subsequent transactions using premature settlement or rollover. As a result, you can prematurely settle one part of the transaction and roll over the other part of the amount using two subsequent transactions with different value dates. Using the liquidity effect, you can generate revenues and expenses for rollovers on the basis of the old rate and include them as a markup in the rollover transaction. The swap components are also grouped into pairs here by means of a reference.

Spot/Forward Transaction: Currency Swap

For more detailed information, see Currency Swaps.

Standard Options: Option Spread

The option spread allows you to enter two currency options (including currency barrier options) at the same time. You can then copy the structure characteristics of the first option to the second option as a default value. This second option can have a different product and transaction type from the first option.

With the option spread, these two options are linked by a reference (unit) of the category, OPT (= Reference option for derivatives).

You can also use the option spread function to create combinations of puts and calls (straddle or strangle; option spread) with identical or differing strikes in parallel.

If you conclude transactions in the local currency, you only need to enter data in the Underlying tab page since in this case the Currency pair field is filled automatically with the local currency.

Back Office: Netting

For more information on this, see Netting

Mirror Transactions

This function is available in the Money Market and Foreign Exchange areas for fixed-term deposits, deposits at notice and for spot exchange transactions and forward exchange transactions. The transactions that are mirrored are linked to each other and also reference each other (reference MIR).

For more detailed information, see Mirror Transactions.

Procedure

Spot/Forward Transaction: Rollover/Premature Settlement

Choose Rollover or Premature settlement

The same screen you use for the fast entry of swaps appears, but you can only enter data on the left-hand side of the screen (1st transaction).

The following fields are predefined in this area: Currency ID, Amounts, and Forward rate of the transaction to be rolled over (prematurely settled). This transaction is the spot basis for the rollover (premature settlement) and for the value date to be changed.

The second side (2nd transaction) shows you the details of the forward transaction to be rolled over, but with offsetting payment flows in the opposite direction.

To make the new entry, you only need to enter the swap rate and the changed value date.

You can enter the liquidity costs of a rollover for the changed spot rate separately in the Liquid. field and use them for your own evaluation reports at transaction level.

Standard Options: Option Spread

Choose Option spread.
Enter the data for the first transaction in the Option 1 area.
The data is copied to Option 2 by the Option spread pushbutton at the top of the screen.
The Transaction type and the Strike have to be adjusted.
You can use the Copy function for similar options.