FX instruments need to be defined before deals can be registered. This setup is done in Register > Instrument Data.
Here's how it works:
- Go to Register > Instrument Data
- Choose Foreign Exchange Transactions and click on New or choose an existing instrument
- Below you find explanations of all the possible settings and options for FX instruments.
||Enter the name of the instrument.
|R - Restriction
||Mark if the register only should be accessible for change by the users with user type manager in the user identity register. If left blank the user who has the right of access to the register can also make changes in the register.
||Enter the convention relevant for the instrument.
If “Act/365” is specified, the actual number of days in the Calculation Period or Compounding Period in respect of which payment is being made divided by 365;
If “Act/360” is specified, the actual number of days in the Calculation Period or Compounding Period in respect of which payment is being made divided by 360;
If “30e/360” or “Eurobond Basis” is specified, the number of days in the Calculation Period or Compounding Period in respect of which payment is being made divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30/day months, without regard to the date of the first day or last day of the Calculation Period or Compounding Period unless, in the case of the final Calculation Period or Compounding Period, the Termination Date is the last day of the month of February, in which case the month of February shall not be considered to be lengthended to a 30/day month).
||Check if a mirror transaction should be created
||Choose if you want the system to default or lock the instrument to spot or forward in deal input
||The number of normal banking days between deal date and value date at the inception of the transaction. The number of days entered here will automatically trigger a value date in the registration form based on the deal date taking into consideration any Saturdays/Sundays or bank holidays in between.
||Check if the counterparts country bank hollidays should be considered
|Non deliverable forward
||Check if it is a non deliverable forward
||Amount rounding is used to define the amount rounding rules for the instrument in deal input. Residual means that rounding is performed only on the residual amount in the transaction. If rounding is used the number of decimals for rounding must be entered.
||Category is an extra sorting order in addition to the portfolio codes. The purpose of the Category is to be able to use as a common denominator for different instruments and spanning over different portfolio codes such as Strategies, Deal types, Transaction types. The category code can be used as a sorting variable in the Report manager, Balance sheet and Profit/loss reports. Category codes must be predefined in Register – Setup – Base code table (as type CA).
|Yield curve fwd
||Enter the name of the Interest code used in yield curves for market valuation of the instrument (Forward). This is the code, with attached interest rates, that the program will look for in the interest rate tables when market valuation is requested in reports. The code to be used here must first be defined in the Base code table under Register/Setup
|Int code + currency
||Interest code + currency as interest code in interest table
||This section determines how Spot Foreign exchange transactions shall be treated in Back office Confirm close and P/L analysis.
The need to distinguish this issue arises for the Spot transactions since they can be seen either as short-term FX forward positions or as pure exchange transactions.
In the first case they shall be treated the same way as forward foreign transactions. Included in P/L analysis and confirmed in back office both at start (deal date) and close (spot date).
In the latter case they shall be treated in the P/L analysis and they need only be confirmed once in confirm start and never in confirm close.
In a third case the transaction is treated in confirm close but not in the P/L analysis.
Spot in Conf-Close
The spot transactions are handled in Confirm-Close in back office
Spot in P/L analysis
The spot transactions are included in profit/loss analysis
||Choose zero coupon portfolio.|
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