T24 Securities Back Office

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Securities Back Office - Objectives

 Introducing the participants to the T24 Securities back office in SC

module

 Learning about linkages with core tables including tax, interest, charges
and commissions

 Learning to set up parameter and other tables connected with the

module

 Learning to input, execute and complete different types of

settlement/corporate action transactions

 Learning about risk management, accounting and messaging, as

appropriate to the back office operations of the module and using
reports and enquiries relevant to the back office operations of the
module

Slide 2
Securities Back Office- Product Overview
Buy

Settlement
Sell
Trade

Transfer
Own Book
Share Dividend/
Bonus
Corporate
Securities Actions
Coupon/
Bond Customer Redemption

Holding

Accruals/
Valuation
Amortisation

Revaluation

Slide 3
Securities Dependencies

 Securities makes use of

 CUSTOMER
 ACCOUNT

 Core dependencies
 Delivery
 Accounting
 Limits

 Securities also uses other Static Tables

Slide 4
Securities Dependencies - Product Related

 Category code are set up through SC.PARAMETER

 For specific transactions possible to set through SC.TRANS.TYPE
 Default range 22000 to 22999
 Default code 22999 set up in SC.PARAMETER in Model Bank

 Since only one category is used, it is possible to consolidate for

reporting and information purpose through ASSET.TYPE and
SUB.ASSET type
 Asset type
Ex:- Shares
 Sub Asset type
Ex:- Equity and Preference Shares

Slide 5
Securities Dependencies - Interest Related

Periodic interest

When a Debt type of

security is purchased,
effective rate can be
picked from here
by the system

Possible to indicate
whether Bid or Offer
rate should be chosen

6
Securities Core Dependencies - Charges Related

These types can be used while collecting Safe Keeping fees

and Portfolio Management fees in Securities.
Required to be indicated in the related Parameter tables

Slide 7
Securities Dependencies - Settlement Related

Accounts used as per Transaction

A/ C 4567 (GBP) currency. First Account indicated is
A/C 7867 (GBP) chosen
A/C 2345 (USD) For GBP Transaction, 4567. As no
A/C 6897 (USD) account is indicated for EUR, A/C 4567 is
chosen for EUR transactions, being the
very first account

SEC.ACC.MASTER
(For Customer) Trade
Buy –A/C 2345
Sell- A/C 4567 Accounts used for specified
Corp. Actions Transactions, irrespective of
Dividend – A/C 2345 Transaction currency
Coupon – A/C 7867

If Account for Transaction currency is

not available in
CUSTOMER. CUSTOMER.SECURITY, Account in
NOSTRO NOSTRO.ACCOUNT used
SECURITY (For
ACCOUNT
Broker)

Slide 8
Core Dependencies - Currency Related

COUNTRY REGION

CURRENCY.PARAM

HOLIDAY

CURRENCY CURRENCY.MARKET

Holidays will be checked for defaulting value date for Trade

Country or Region specific tax rates can be set up
Currency exchange rates used or trades involving two currencies and
valuation of portfolios

Slide 9
Securities Core Dependencies - Limits

Setting Issuer / Counterparty limits

applicable only for Own Book Portfolios

Only Overdraft checking relevant

for Customer portfolios
Issuer
Risk
for Bonds

Own Book

Delivery against Payment

Counter Party Delivery without Payment
(Broker) Risk
No Delivery No Payment

Slide 12
Application Specific Parameters

Slide 13
Securities - Parameter Tables

 The Parameter tables to be set-up during implementation are given

below:

 SC.PARAMETER

 SC.STD.POS.TRANSF

 SC.STD.CLEARING

 SC.STD.BOND LEND

 DIARY.TYPE

Slide 14
Securities - Parameter Tables

 The Parameter tables to be set-up during implementation are given

below:

 CONDITION.PRIORITY SCSK.GEN.CONDITION

 SCSF.CHARGE.PARAMETER SCSK.GROUP.CONDITION

 SAFECUSTODY.VALUES SCPM.GEN.CONDITION

 SCPM.CHARGE.PARAMETER SCPM.GROUP.CONDITION

Slide 15
SC.PARAMETER - Corporate Actions Related

 Coupon and Redemption events

 Automatic processing of interest/redemption of bonds
 Coupon event set up thorough COUPON.TYPE Field
 REDEMPTION.TYPE Field for redemption event

 Core routine for automatic processing

 Routines for processing the above events during COB set through JOB.NAME
Field
 Reports generated for the above events

 Dates for processing

 START.DATE and END.DATE Fields are the range of dates between which
the above processing takes place
 Dates recycled as part of COB

 Splitting of commission and local tax

 If SPLIT.COMM set as YES commission amount posted separately
 If SOURCE.TAX.SPLIT Field set as YES, then tax entries will be posted
separately into the customer account

Slide 16
SC.PARAMETER - Corporate Actions Related

 CA based on record dated positions

 In certain markets, Corporate Actions processing is based on settled position

as on record-date which is now supported by the system

 It is now possible to include certain transactions done on or after ex-date but

settled on or before the record date for CA processing

 It is now possible to exclude certain Transfers/Trades done on or after the ex-

date

 The record date can be the same as ex-date, post or prior to the ex-date

 If a Transfer has been initiated prior to the ex-date but not settled by record
date, the same is included in eligible holding calculations, by default. It is also
possible to exclude those from the calculations, if required

 MT567 message

 MT567 is a corporate action status and processing advice sent by an Account

servicer (custodian / sub-custodian) to an Account owner

Slide 17
SC.PARAMETER - Settlement Related

 Choice of Actual or Contractual settlement

 Set through ACTUAL.SETTLEMENT Field
 Yes/No flag, triggers the accounting on actual settlement basis

 Following fields to be used for actual settlement i.e if above set to YES
 CUST.ACT.SUSP.CAT Field to define internal account category for
customer amount
 BROK.ACT.SUSP.CAT Field to define internal account category for broker
amount
 MISC.ACT.SUSP.CAT Field to define internal account category for other
charges/tax amount
 Posting of suspense entries till the settlement
 Internal accounts to be opened in the local currency

Slide 18
SC.PARAMETER - Valuation Related

 Portfolio Valuation routines

 VALUATION.SUBR Field used to specify the company specific valuation
sub-routine that will be used to produce the customer or internal valuation
reports
 User defined routines can be used

 Default suffix of portfolio

 For portfolio valuations identifies portfolio, where Customer has more than
one to post other application transactions
 If DEFAULT.SUFFIX Field set as NO, then such transactions not defaulted
 If set as “FX”, etc or ALL, first portfolio available is selected for default
respective transactions

 Position holding
 Choice of separate valuations of holdings, depository wise or combined
 SEP.DEPOSITORY Field is set to YES or NO to allow whether different
depositories to be shown as such on portfolio valuations reports

Slide 21
SC.STD.POS.TRANSF

 Id is Company code

 Parameter table for POSITION.TRANSFER and

SECURITY.TRANSFER transactions

 Set-up of
 Categories and transaction codes charges
 Commissions for brokers and customers
 Trade discounts and re-allowances

 Transaction level rules

Slide 23
Other Tables

 SC.STD.CLEARING
 Id is company code
 Transaction level rules

 SC.STD.BOND.LEND
 Id is company code
 Default values which will be used when processing bond lending
transactions

 DIARY.TYPE
 Set up different types of events that will be included in the corporate actions
processing

Slide 24
Fees Set Up

 Safekeeping
 For safekeeping customers’ securities
 Only chargeable on security holdings

 Portfolio management
 For management of portfolio for giving investment advice, order processing,
corporate action administration etc
 Based on total value of assets in the portfolio
 Note these are periodic fees charged by the Bank to its customers and not
charged to the Bank by external parties like Brokers, depositories etc.

 Setup of parameters
 Fees based on customer type, Fees based on the security type

Slide 25
Safe Keeping Fees Structure

FT.COMMISSION.TYPE

CONDITION.PRIORITY
ALL

ASSET.TYPE
SCSK.GEN.CONDITION
SUB.ASSET.TYPE

SECURITY CUSTOMER.
CHARGE
LOCAL REF.

SCSK.GROUP.
SCSF.CHARGE.PARAMETER CONDITION

26
Advisory Fees Structure

FT.COMMISSION.TYPE

CONDITION.PRIORITY
ALL

ASSET.TYPE
SCPM.GEN.CONDITION
SUB.ASSET.TYPE

SECURITY CUSTOMER.
CHARGE
LOCAL REF.

SCPM.GROUP.
SCPM.CHARGE.PARAMETER CONDITION

27
Fees - Gen Condition

 SCSK.GEN.CONDITION and SCPM.GEN.CONDITION

 Once CONDITION.PRIORITY record for SC.SAFEKEEPING and

SC.MANAGEMENT is authorised, the respective tables get selection
values defaulted from it

 Choices defined in CONDITION.PRIORITY are automatically defaulted

in ITEM and PRIORITY Fields here

 They can be multi valued by indicating Y in MULTIVALUE Field to

include any desired combination

Slide 31
CUSTOMER.CHARGE

 Records the charge group and charge details for T24 applications

 Record automatically created for each new Customer

 Can set-up multiple portfolios for the same Customer with different
charging scales

 Depository Group must be set-up if the type in

CUSTOMER.SECURITY is “depository”

Slide 32
Fees - Charge Parameter

 SCSF.CHARGE.PARAMETER and SCPM.CHARGE.PARAMETER

 Define the rules for deriving the amount to be used for fee calculations

 Rules may be different for types of security and must be grouped

accordingly

 Id
 Represents the various levels of classification
 Valid security
 ASSET.TYPE prefixed with A-
 SUB.ASSET.TYPE prefixed S-
 ALL for all other types of security
 Option to include Local reference Fields

Slide 33
Order of Priority - Safekeeping Fees

Matching Classification Id Format Example

Order
1 Security Number ‘.’ nnnnnn-nnn ‘.’ 123456-000.100001
Depository Depository
2 Security Number nnnnnn-nnn 123456-000
3 User defined local “L-“n (n – a valid L-1.100001
reference ‘.’ Depository value in user
defined local
reference) ‘.’
Depository
4 User defined local “L-“n (n – a valid L-1
reference value in user
defined local
reference)
5 SUB.ASSET.TYPE ‘.’ “S-“n to “S-“nnnn ‘.’ S-300.100001
Depository Depository

Slide 34
Order of Priority - Safekeeping Fees

Matching Classification Id Format Example

Order
6 SUB.ASSET.TYPE ‘.’ “S-“n to “S-“nnnn ‘.’ S-300.GB
COUNTRY.CODE COUNTRY.CODE
7 SUB.ASSET.TYPE “S-“n to “S-“nnnn S-300
8 ASSET.TYPE ‘.’ “A-“n to “A-“nnn ‘.’ A-20.100001
Depository Depository
9 ASSET.TYPE ‘.’ “A-“n to “A-“nnn ‘.’ A-20.GB
COUNTRY.CODE COUNTRY.CODE
10 ASSET.TYPE “A-“n to “A-“nnn A-20
11 Default ‘.’ Depository “ALL” ‘.’ Depository ALL.100001
12 Default “ALL” ALL

Slide 35
Order of Priority Advisory Fees

Matching Classification Id Format Example

Order
1 Security Number nnnnnn-nnn 123456-000
2 User definedlocal “L-“n (n – a valid L-1
reference value in user
defined local
reference)
3 SUB.ASSET.TYPE ‘.’ “S-“n to “S-“nnnn ‘.’ S-300.GB
COUNTRY.CODE COUNTRY.CODE
4 SUB.ASSET.TYPE “S-“n to “S-“nnnn S-300
5 ASSET.TYPE ‘.’ “A-“n to “A-“nnn ‘.’ A-20.GB
COUNTRY.CODE COUNTRY.CODE

6 ASSET.TYPE “A-“n to “A-“nnn A-20

7 Default “ALL” ALL

Slide 36
Fees - Charge Parameter

 Base to be used for calculating the basis amount

 BASE.CODE Field defines the method of calculation along with a
percentage to be applied
 Valid base codes are
VALUE based on market value of securities
NOMINAL for quantity of securities
NOMINAL.LCY which calculates the current Nominal value converted into
Local Currency
 Multi-valued to allow different percentage for the base code

 Percentage to be used
 HIGHEST.LOWEST Field defines which of the above percentage is used for
base amount

Slide 37
SCSK.GROUP.CONDITION / SCPM.GROUP.CONDITION

 Calculation method
 Defined through CALC.METHOD Field
 Choices Total or Detail

 Levels for calculating the charges within each activity

 SECURITY.TYPE Field identifies the level for such calculation amount
 Should be defined in the charge parameter
 Possible to set country wise charges
 The check on country code will be based on SAFECUSTODY.VALUES.

 If calculation type is detail, then define the fees for each of SEC.TYPE
 Defined through DET COMM.TYPE and DET.PERCENTAGE Fields

 If Total calculation type then define the fees and percentage

 Defined through TOT.COMM.CODE and TOT.PERCENT Fields

Slide 40
Fees - Group Condition

 Depository charges
 CALC.DEP.CHARGES Field if Null implies applicability of charges

 Override message generated if charges collected from 3rd party

account

 Minimum and/or maximum charges applicable by currency for

safekeeping and management fees
 MIN.MAX.CCY Field to define currency
 MIN.AMOUNT and MAX.AMOUNT Fields to define such amount
 DEF.MIN.MAX.CCY Field will contain the default currency

Slide 41
SAFECUSTODY.VALUES

 Parameter table for Fees

 Id is company code

 Charge type
 CHARGE.TYPE Field has 2 multi value sets,
 One for safekeeping charges (SC) and another for advisory charges (IC)

 Holds category and transaction codes for each type of fee

 Applicability of portfolios
 MAN.ACC.CALC Field specifies the type of managed account as defined on
the SEC.ACC.MASTER that will have charges applied to them

Slide 42
SAFECUSTODY.VALUES

 Dates to be used in calculating advisory charges

 CALC.TYPE Field indicate the dates to be used in calculating the portfolio
advisory charges for portfolios connected with the group
PERIODIC.OPEN - automatic and portfolio was opened since last run
PERIOD.NORMAL - automatic and portfolio was open at the time of
the last fee run
CLOSURE.NORMAL - when the fees calculated because a portfolio
is being closed and the portfolio was open at the time of the last fees run
CLOSURE.OPEN - when the fees calculated because a portfolio
is being closed and the portfolio has been opened since the last fee run

 Number of months in the period for the period type defined in the
associated CALC.TYPE Field
 Done through PERIOD START, PERIOD.END & NO.OF.MONTHS Fields
L Date of last fees run
C Today’s system date
O Date of opening of portfolio

Slide 44
SAFECUSTODY.VALUES

 Perform accrual
 PERFORM.ACCRUAL Field is associated with the CHARGE.TYPE Field
 Set to MONTHLY for monthly accrual of the fees

 Accrual category
 Internal account needed if PERFORM.ACCRUAL Field is Y
 ACCRUAL.CATEG Field is the category code of internal account number

 Post charges
 POST.CHARGES Field specifies whether clients accounts are to be
automatically debited with safe custody charges

 Depository charges category and transaction code

 DEP.CHG.CATEG.CODE Field specifies the category code
 DEP.CHG.CR.CODE Field specifies the transaction code to post such
charges

Slide 45
Product Features

Slide 46
Trade Processing

Order Placement
Order Off Market trades
transmitted
to broker

Confirmation Execution of the order

from broker
Confirmation
Direct from
Input of depository
trade Message to
depository
Completion of Settlement of
trade trade

Transfer between
portfolios/depositories
Position Transfer
Security Position

Slide 47
Settlement

Slide 48
Securities Settlement

 Contractual Settlement
 T24 assumes Customer side settles on Value Date irrespective of broker
settlement
 Effectively “no fail” market for Customer trades
 When a contract is completed, assumed that settlement has taken place

 Actual Settlement
 Accounting entries and position updates for Customer and Broker side of
SEC.TRADE generated only on receipt of settlement advice from depository
 Facility to track failures
 Positions are updated on completing the transaction as unsettled
 Accounting is raised to suspense till the settlement of security/cash is done
 When the parameter is set ON, then can be controlled at the contract level
for trades and off market trades as well

Slide 49
Automatic Settlement

 Agreement needed with customer for automatic settlement on the due

date:

 CUSTOMER.SECURITY
Respective record has AUTO.CUST.SETT Field to be updated with YES
Similarly for Broker, field AUTO.BROK.SETT Field

 Transaction level
Defaults into the AUTO.CUST.SETT or AUTO.BROK.SETT Fields from
CUSTOMER.SECURITY
At the transaction level, possible to override the defaulted values

 Own book transactions

All own book trades will be taken as contractual

Slide 54
Securities Settlement - Internal Table / Enquiries

 SC.SETTLEMENT
 Record created for handling the settlement of cash/nominal

 SC.SETTLE.CUST
 Details of the unsettled nominal/cash of the transaction
 Id = Transaction Id
 Can be viewed using Enquiry SC.UNSETTLED

 ENQ SC.SETT.ENTRIES
 Contains the unsettled accounting entries
 To view the entries use Enquiry SC.SETT.ENTRIES

Slide 55
Securities Settlement - Accounting

 When transaction is with actual settlement, then entries raised to the

suspense accounts instead of the customer accounts

 On settlement, original entries raised to the respective account heads

to the extent settled with the suspense entries reversed

Slide 56
Workshop - 1

 Use Role Based Home Pages> Private Operations > PWM Middle
Office > Dealer > Direct Trade Input > Direct Trades
 Input a purchase trade for Customer with both cash & security settlement as
YES using the following details
 10000 nominal of 100040-000(existing security) with today’s value date, at a
price of 101, through the broker 100624, giving the beneficiary bank as
100460
 Get the record authorised

 Run the enquiry SC.SETT.ENTRIES and view unsettled entries

 Use User Menu > Private Operations > Securities > Back Office >
Accounting Entries > View Transaction Entries
 View the accounting entries by giving the trade Id of your transaction

Slide 59
Workshop - 1 Solution

Slide 60
Workshop - 1 Solution

Slide 61
Workshop - 2

 Use User Menu > Private Operations > Securities > Back Office >
Security settlement > Outstanding Settlement
 Settle the transaction partially for a nominal of 6000 and cash
 Get the record authorised

 Use User Menu > Private Operations > Securities > Back Office >
Security settlement > Position summary
 Indicate your portfolio and view the position of unsettled securities

Slide 62
Workshop - 2 Solution

Slide 63
Workshop - 2 Solution

Slide 64
Workshop - 3

 Use User Menu > Private Operations > Securities > Back Office >
Security settlement > Outstanding Settlements
 Settle the remaining nominal of 4000 and cash
 Get the record authorised

 Use User Menu > Private Operations > Securities > Back Office >
Accounting Entries > View Transaction Entries
 View the accounting entries by giving the trade Id of your transaction

Slide 65
Workshop - 3 Solution

Slide 66
Workshop - 3 Solution

Slide 67
Workshop - 4

 Use command line

 Amend the CUSTOMER.SECURITY record for the Customer used, to
contractual settlement YES and commit the record

 Use User Menu > Private Operations > Securities > Middle Office >
Client Order Execution > Direct Sec Trade Input
 Input a trade for the bond created for purchase of 10000 and 20000
nominal at a price of 99 on behalf of above customer and another existing
customer 100404
 Use the broker as 100624
 Cash & security settlement as YES with today's value date
 Note how system defaults automatic settlement for the Customer
 Get the record authorised

 Use User Menu > Private Operations > Securities > Back Office >
Accounting entries > View Transaction entries
 View the accounting entries by giving the trade Id of your transaction

Slide 68
Workshop - 4 Solution

Slide 69
Workshop - 4 Solution

Slide 70
Workshop - 4 Solution

Slide 71
Workshop - 4 Solution

Slide 72
Workshop - 5

 Use User Menu > Private Operations > Securities > Back Office >
Security settlement > Outstanding Settlements
 Settle the transaction fully

 Use User Menu > Private Operations > Securities > Back Office >
Accounting entries > View Transaction entries
 View the accounting entries by giving the trade Id of your transaction

Slide 73
Workshop - 5 Solution

Slide 74
Workshop - 5 Solution

Slide 75
Enquiries and Reports

 Customer holdings
 Depository
 Customer
 Security

 Reports
 Pending orders
Report name PENDING.OPEN.ORDERS
 Executed orders
Report name EXECUTED OPEN ORDER
 Orders to be purged
Report name ORDERS.TO.BE.PURGED
Other reports are available showing depot positions, unsettled trades,
daily trade activity, inventory (trading positions) etc, or can be user
defined and including in COB

Slide 79
ENQUIRIES and REPORTS

 Enquiries
 SC.SETT.ENTRIES – Unauthorised accounting entries for the outstanding
unsettled positions
 SC.UNSETTLED.CUST – Unsettled transactions by customer
 SC.UNSETTLED – Detailed enquiry for each unsettled transaction
Can be drilled down from SC.UNSETTLED.CUST

 Reports
 SC.UNSETTLED.RPT - Overnight settlement reports are created
 Show all unsettled transactions

Slide 80
Security Position Related Files

Slide 82
Security Position Files

 SECURITY.TRANS
 Holds all transaction details
 Key is transaction reference

 SECURITY.POSITION
 Holds cost of position in various components/currencies
 Holds the position for a portfolio by security and depository
 Holds the settled and unsettled details
 Holds Repo / Reso position
 Holds lent position
 Holds blocking of securities

Slide 83
Security Position

 SC.TRADING.POSITION
 Holds the position details for Own Book portfolios
 Holds accrual and amortisation

 SC.TRADE.POS.HISTORY
 Historic details of SC.TRADING.POSITION held monthly

 SC.TRANS.POS.HISTORY
 Historic transaction details that build to SC.TRADING.POSITION

Slide 84
SECURITY.TRANS

 Contains the nominal, price and cost details of the transaction.

 Id is same as the transaction suffixed by a serial number

 Generally 2 one for the customer and another for the depository
 Three under US settlement method
 Unsettled nominal detail broker wise

 Gross and net amount in Security and Trade currency

 Charges and other details

 Additionally holds the information to be used for the valuation purpose

in 3 currencies
 Security, Reference and Local currency/ base currency

Slide 85
SECURITY.TRANS

 All securities transactions that involve movement in securities position

would update the SECURITY.TRANS table

 Contains the nominal, price and cost details pertaining to the

transaction

 Cost of investment
 COST.INVS.BASE.CCY , COST.INVST.REF.CCY and
COST.INVST.SEC.CCY Fields hold the gross amount together with the
charges in the three currencies

 Gross cost investment

 GROSS.COST.BSE.CCY , GROSS.COST.REF.CCY
GROSS.COST.SEC.CCY Fields hold the gross amount

Slide 86
SECURITY.TRANS

 Book cost
 BOOK.COST.BSE.CCY, BOOK.COST.REF.CCY, BOOK.COST.SEC.CCY
Fields contains the net cost of the transactions

 Gross book cost

 GR.BK.COST.BSE.CCY, GR.BK.COST.REF.CCY,
GR.BK.COST.SEC.CCY Fields contains the gross cost of the security
transaction in the security

 All the amounts are with a sign

 Negative for debit
 Positive for credit to the position

Slide 87
SECURITY.POSITION

 Up-to-date security position details are stored in this live table

 Modified by one of the security transactions
 Exist for every client / security combination
 Own book and customer portfolio
 Stores positions in both Average Purchase Price and Weighted Average
Price Basis
 Details built from the individual SECURITY.TRANS record

 Id format can be broken down into the following components

 PORTFOLIO, SECURITY, DEPOSITORY, NOMINEE, MATURITY DATE,
RATE and SUB.ACCOUNT
 Normally the first four

 Inclusion of open order Closing balance

 NET OPEN.ORD.POS Field

Slide 88
Workshop - 6

 Use Role Based Home Page > Private Operations > PWM Front
Office > PWM Front Office Operations > Position Enquires >Security
Positions > Positions by portfolio
 Indicate your customer’s portfolio and view position
 Observe the settled/ unsettled columns

 Use Role Based Home Page > Private Operations > PWM Front
Office > PWM Front Office Operations > Position Enquires >Security
Positions > Positions by Security
 Indicate Security (Shares & Bonds)
 View position of your portfolio

 Use Role Based Home Page > Private Operations > PWM Front
Office > PWM Front Office Operations > Position Enquires >Security
Positions > Positions by Depository
 Indicate your depository and view position

Slide 96
Workshop - 6 Solution

97
Workshop - 6 Solution

98
Workshop - 6 Solution

99
SC.TRADING.POSITION (STP)

 Id is based on portfolio and security

 Details of the trading position held by Own Book portfolio and security

 Transaction details
 Details of the transaction updated online

 After COB, various balance updated

 Asset balance
 Contingent asset balance
 Contingent interest accrual details

Slide 100
Workshop - 7

 Use Role Based Home Pages > Private Operations PWM Middle Office
> Dealer > Proprietary Trading > Proprietary Trading SC > Proprietary
Positions
 View Own Book Positions by giving your own book portfolio Id
 Observe the position updates that has taken place for a own book trading

 Use Role Based Home Pages > Private Operations PWM Middle Office
> Dealer > Proprietary Trading > Proprietary Trading SC > Proprietary
Positions
 View Own Book Positions of an existing portfolio
 Observe the accrued interest

Slide 104
Workshop - 7 Solution

Slide 105
Workshop - 7 Solution

Slide 106
Example for COB Updation

 Step 1
 A purchase trade input on 4th Dec with value date on 15th Dec for a bond
to a dealer book at a price 99 $
 Interest at 6.173 for 66 days from 10 Oct to 15 Dec resulting to 111.62$

 Step 2
 After COB taking the date to 15th, a sale of 7000 nominal input with value
date as 15th Dec at a price of 101$
 Market price is 99.75
 Related position files are updated after COB

Slide 107
SC.TRADE.POS.HISTORY

 Historic position of STP

 Id is STP Id concatenated with YYYYMM, where Y is year and M is the

month

 Daily details in each multi value set

 Cumulative accruals and daily accruals

 Value dated and current position as on each date

Slide 108
Off Market Trades

Slide 111
Off Market Trades

 SECURITY.TRANSFER
 Transfer in & out of a portfolio
Against payment or free of payment
Allows both security & financial updates
Produces customer, broker & depository advices

 Generally used for

 Transfer of securities when customer’s portfolio is transferred
 Setup for first time at the time of takeover into T24
 Transfer of securities when portfolio has dealt directly with broker
and settlement through the bank

Slide 112
SECURITY.TRANSFER

 Transaction between the customer on one side and a broker,

counterparty or client on the other side

 Charges get defaulted from the SCTR.GROUP.CONDITION for the

customer

 Can be contractual or actual settlement

Slide 113
Workshop - 8

 Use Role Based Home Pages> Private Operations > PWM Back Office
> PWM Back Office Operations >Transfer transactions > SC Transfers
> Free Receipt / Delivery> Contractual free Receipt
 Input a share transfer in with a back value date for 5000 nominal
 Use customer and broker created earlier
 Commit and get the record authorised

 Use User Menu > Private Operations > Securities > Back Office >
Accounting entries > View Transaction entries
 View the accounting entries by giving the Id of your transaction

Slide 114
Workshop - 8 Solution

Slide 115
Workshop - 8 Solution

Slide 116
Workshop - 9

 Use User Menu > Private Operations > Securities > Back Office >
Transfer transactions > Delivery against Payment
 Input an existing bond transfer out for 10000 nominal with back value date
 Use customer and broker created earlier
 Cash hold settle and security hold settle as yes
 Commit and get the record authorised

 Use User Menu > Private Operations > Securities > Back Office >
Accounting entries > View Transaction entries
 View accounting entries by giving Id of your transaction

Slide 117
Workshop - 9 Solution

Slide 118
Position Transfer

Slide 119
POSITION.TRANSFER

 Transfer some or all positions

 From one portfolio to another belonging to the customer

 From one portfolio to another customer when an override is raised

 From one depository to another for a portfolio or a customer

 From one nominee account to another

 From one sub account to other sub account

 Can specify a particular customer

 Can specify nominal amount

Slide 120
POSITION.TRANSFER

 If AUTO.SELECT Field set as Y

 Then the positions for transfers are displayed with option of changing any of
the details of the transfer

 For actual settlement since no cash transfer only SEC.HOLD SETTLE

Field is applicable

Slide 121
Workshop - 10

 Use User Menu > Private Operations > Securities > Front Office >
Security Position Enquiries > Positions by portfolio
 Indicate your portfolio and view the position. Observe that the security
position for your customer with a particular depository

 Use User Menu > Private Operations > Securities > Back Office >
Transfer transactions > Position tfr between custodians
 Input a POSITION.TRANSFER from above depository to another depository
for the bond position
 Use position of the bonds created earlier

 Observe the SECURITY.TRANS and SECURITY.POSITION records

that are created

Slide 122
Workshop - 10 Solution

Slide 123
Workshop - 10 Solution

Slide 124
Workshop - 10 Solution

Slide 125
Workshop - 10 Solution

Slide 126
Valuation

Slide 127
T24 Securities Valuations

Online

Valuations of the portfolio

Batch processing

Interest accruals Discount accruals Capitalisation

Interest accrued Discount accrued Revaluation

Market price changes Currency exchange Sale of securities

rates

Slide 128
Valuation

 Important valuation enquiries

 Enquiry SC.VAL.COST
 The enquiries to be run giving the portfolio no
 Can be specified with online valuation as YES/NO

 Enquiry SC.VAL.MARGIN
 Once the valuation has been completed in the above enquiry, then this will
contain all the details with margin information for each security

Slide 129
Valuation Tables

 SC.POS.ASSET
 Main file built from SECURITY.POSITION for the security
transactions
 Gets built for the valuation of other modules with which interfaced
 Interface to other modules setup in the ASSET.TYPE record
The suffix of the default portfolio is available in SC.PARAMETER
 When online valuation is run, the file gets built
 Gets built also during COB
 Margin details related to portfolio (Top Up/Sell Out) will get updated
 Id of the record will be <portfolio.id>.<sub.asset.type>.<asset.type>

Slide 130
Valuation Tables

 SC.POS.ASSET.WHILE.COB
 Holds SC.POS.ASSET details when valuation is run during COB

 SC.GROUP.POS.ASSET
 Similar to SC.POS.ASSET
 File built with position details for the group defined in
SC.VALUATION.GROUP
 Online services SC.GROUP. VALUATION and
SC.GROUP.VALUATION.MARGIN need to be run for updating
valuation details for Group online

Slide 131
Workshop - 11

 Use User Menu > Private Operations > Wealth Management >
Relationship Manager > Customer and Portfolio Enquires > Customer
Overview

 Choose the portfolio created earlier

 View the portfolio

 Choose the online valuation option from the drop down

 Run the online valuation at cost

Slide 132
Workshop - 11 Solution

Slide 133
Workshop - 11 Solution

Slide 134
Revaluation

Slide 135
Revaluation

 Only for own book portfolio

 Marked to market valuation of the position with respect to the market

price fluctuations

 Accounting of the revaluation

 Position updates

Slide 136
Revaluation

 Revaluation accounting set up depending based on the type of portfolio

 Defined through SEC.ACC.MASTER
 For investment or commercial purposes
 Different tax rate is applicable if Securities are bought or sold for investment
or commercial purposes.
 Options are Trading, Investment, Available for Sale
 Unrealised profits due to revaluation of trading & investment portfolio has
two choices
Could be raised to LIVEDB (Asset) or Internal account & credited to P&L
 But for a AVAIL.SALE portfolio it is debited to LIVEDB or Internal account
and credit is always to internal account and not to P&L category

Slide 138
Example of Revaluation

 A SAM record is set with revaluation as Yes, daily frequency

 Transactions input as below

 Purchase of 3000 nominals at 99 when the market price is 99.75

 After COB, entries as under

 Unrealised profit of 22.5 credited to category defined as Unrealised profit
category
 The same amount is debited to the internal account defined under
Unrealised profit provision of SAM record
 Calculation is 3000*(99.75-99)/100 = 22.50 (profit)

Slide 139
Example of Revaluation

 On the next day when the price moves to 99.9, then after COB, the
revaluation will be as under

 Revised revaluation profit is 3000*(99.9-99)/100 = 27$

 If Revaluation method is ADJ

 The entries raised only for the difference (27-22.5) = 4.5

 If Revaluation method is I/O

 The earlier entries are reversed as debit to profit category with credit to
internal account of 22.50
 A fresh entry is raised for 27 by credit to profit category & debit to the
internal account

Slide 140
Realised Profit or Loss

 In the same example we had purchased 10000 at 99 and sold 7000 at

101 resulting in a profit
 7000*2/100 = 140$
 ENTRIES RAISED are debit to LIVEDB and a credit to the profit category

 Consol balance will be

 Debit to LIVEDB for purchase 9900

 Credit to LIVEDB for the sale 7070

 Realised profit Debit to LIVEDB 140

 Hence the balance in LIVEDB will be debit at 2970

 Calculated as 3000*0.99 which is the average price

Slide 141
Corporate Actions

Slide 144
Corporate Actions

Holdings

Event

Dividends

Cash
Coupons…. Entitlements

Bonus

Stock
Rights….

Reinvestment
Multiple Options

Takeover….

Meeting Type Events

Non Financial CA’s Change Type Events

Slide 145
Corporate Actions

 Examples

 Dividends

 Coupons

 Redemption

 Bonus

 Takeover

 Rights

Slide 146
Corporate Actions

 Setup
 Parameter for defining the characteristics of each event of corporate action
 Different types – RIGHTS,COUPON,DIVIDEND, etc

 Flow
 Capture the declaration of the event – manual or external feed
 Creates the entitlements of the portfolio based on the holding as on a
particular date
 Options to be exercised by the portfolios

Slide 148
Corporate Actions

 Service agents
 Corporate actions processed using service agents

 Accounting
 Choice contractual or actual
 Receipt of cash/security from the depository

 Position updates
 Based on the event, security position to be updated

 Tax setup
 Events could be gross/net
 Tax for the event should be parameterised
 Tax setup based on the customer residence/status

Slide 149
Corporate Actions

 Delivery
 Message generation to the depository

 Actual settlement
 Linked to the SC.SETTLEMENT file for actual settlement
 Appropriate accounting and position updates

 Special types
 Specific rounding of nominal
 Handling of short position

 COB Processing
 For fixed events namely coupon/redemption can be included in parameter
for processing during COB

Slide 150
DIARY.TYPE

 Defines a type of corporate action

 Contains the processing details and rules associated with each Corporate
Activity type
 Specifies the benefits for the event

 Applicability of cash for the event

 CASH Field to indicate whether cash is payable on the event
Ex:- Dividends, Coupons

 Change in the Security position

 SECURITY.UPDATE Field to indicate whether there can be a change in
Security holdings as a result of the event
 Whether the security position is affected
 Specifies whether stock is considered as a benefit
Ex:- Bonus, Redemption

Slide 151
DIARY.TYPE

 Investment of cash in the same security

 REINVEST Field to indicate whether any cash offered can be reinvested in
the original security
 Should be set to 'Y' if the event specifies whether the cash can be
reinvested in the same security
Ex:- Dividend Reinvestment

 Single or multiple option

 OPTIONS Field to indicate whether multiple options are offered
 Multiple options or alternatives for the event
 If set to 'Y' then ENTITLEMENT records will always be created on hold
Ex:- Takeover, Cash or stock option

 New securities offered by the event being different

 NEW.SECURITIES Field to indicate the same
Ex:- Takeover

Slide 152
DIARY.TYPE

 Portfolios will retain their original holding or not

 RETAIN.ORIGINAL Field to indicate whether their original holding is
retained for the event
 Original reduced to 0 if NO
Ex:- Yes for Bonus, No for Takeover, Redemption

 Free new securities

 FREE.SECURITIES Field to indicate whether any free securities are
offered and whether the new securities are priced or not
Ex:- Bonus or a Stock Dividend and 'N' for a Call Payment

 Rights event
 RIGHTS Field to indicate whether any securities will be issued by the event
Ex:- Rights

Slide 153
DIARY.TYPE

 Default charges setup for the event

 Set up through COMMISSION.TYPE Field
 Valid record in FT.COMMISSION TYPE

 Transaction Type from SC.TRANS.TYPE

 TRANSACTION.TYPE Field to be used while processing

 Category codes
 Exchange profit defined through EXCHANGE.PL.CAT Field
 REALLOWANCE.PL.CAT Field is used for reallowance category
 Related transaction code

Slide 154
DIARY.TYPE

 Verification of Entitlements
 VERIFY.REQUIRED Field if set to Yes, then Entitlement to be verified
before input
 SC.ENT.VERIFY
Used for bulk verify of Entitlement records for a DIARY

 Creation of diary record

 DIARY.CREATE Field is used to define at which DIARY record is created
from SC.PRE.DIARY
AUT,NAU,HLD

 Creation of entitlements
 AUTO.ENTITLE Field control whether ENTITLEMENT records are
automatically created when the DIARY is authorised
 On Authorisation of diary service is run to create entitlements
 If the field is No then no entitlement will be created

Slide 155
DIARY.TYPE

 Accounting entries for the event

 Suspense account
 SUSPENSE.ACCOUNT Field used to input the category to post the
depository side of cash transaction

 Automatic updation of Nostro

 If UPDATE.NOSTRO Field is YES, then the Nostro will be raised for the
depository side else remains in suspense

 Forward accounting
 If FWD.ACCT Field set as Y then the number of days forward to be
specified

Slide 156
DIARY.TYPE

 Stock Borrow/Lend Dividend processing

 Set up through SBL.DIV.PROC Field

 Dividend reinvestment
 DRIPS field distinguish DRIP event from other types of corporate events.
 Dividend reinvestment functionality
 If YES, then price can be input after authorising DIARY
 Category
 Customer/bank

 New fields TOLERANCE.CATEG, TOLERANCE.PCT,

TOLERANCE.CCY and TOLERANCE.AMT are added to compute the
tolerance limit applicable for the specific diary event.

PARTIAL.STP will accept a valid record from the SC.PARTIAL. STP

application or the value “ALL”.

Slide 167
DIARY.TYPE (Non Financial Corporate Actions)

 Meeting type events with option – Voluntary

 No movement in Cash or Stock.

 Based on the incoming MT564 SC.PRE.DIARY
will be created
 SWIFT.CAEV field in the record will have the
value XMET which will match the incoming
MT564 in the DIARY.TYPE

 Change type events – Mandatory

 No movement in cash or stock

 Eg: Change in the name

Slide 169
Corporate Actions Processing

Slide 172
CORPORATE ACTIONS - FLOW

Used to capture from SC.PRE.DIARY

external feed Direct input

SC.CA.PARAMETER
should be setup with DIARY
the Id as DIARY.
When the Based on the holding of
SC.PRE.DIARY is the security by a portfolio
authorised then a as on EX.DATE, individual
DIARY is created. records get created when
DIARY is authorised and
ENTITLEMENT service agent is initiated.

Slide 173
Corporate Actions Service Agents

 SC.CA.PARAMETER
 ID as DIARY/ENTITLEMENT/SC.SETTLEMENT
 OFS.SOURCE record used by the corporate actions
 Version record for the processing to be done OFS
 TOLERANCE.CATEG, TOLERANCE.PCT, TOLERANCE.CCY and
TOLERANCE.AMT to be set to check tolerance limit applicable
 STP needs to be set to yes if the log file needs to be maintained.
 DIARY
 For DIARY creation from SC.PRE.DIARY, no service agent required

 ENTITLEMENT
 For ENTITLEMENT creation from the DIARY record service agents will
have to be initiated

 SC.SETTLEMENT
 For auto authorisation of settlement record for the trade in a conversion
type of corporate action, service agents will have to be run

Slide 174
Corporate Actions Service Agents

 For the purpose of using service agents in corporate actions, the

following files needs to be setup:

 BATCH
 For running the service a batch record should exist with no batch stage
mentioned

 TSA.SERVICE
 With same Id as the BATCH record

Slide 175
BATCH

 XXX/SC.CORPORATE.ACTIONS

 SC.ENTITLE.CREATE
 For creation of entitlement from the diary

 SC.DIARY.REVERSAL
 For reversal of diary

 SC.STOCK.CONV.SETTLE
 For auto settlement of trade for a conversion of security

 SC.ENTITLE.MODIFY
 For processing reinvestment when price is input

Slide 176
SC.PRE.DIARY

 SC.PRE.DIARY used for the capture of details from external source (i.e.
Reuters, Bloomberg etc…)
 Following swift messages are processed using OFS
MT550 Notice of rights,
MT551 Notice of event,
MT552 Notice of offer or privilege,
MT554 Advice of money income,
MT555 Advice of income in the form of securities,
MT556 Advice of redemption,
MT560 Notice of bond or shareholders’ meeting,
MT563 Corporate action confirmation.
MT564 Corporate action notification
MT566 Confirmation to the account owner of a corporate action event
MT567 Account adviser sends CA status to the account owner
MT568 Provide complex instructions or narrative details relating
to a corporate action event
 Used to receive the information from swift messages such as the security
number, the event type, and the depository

Slide 178
MT564 MESSAGE

 Corporate action can be processed via an incoming notification

message (MT564), which creates an SC.PRE.DIARY record. It
is used to receive the information from the SWIFT messages
such as the security number, the event type and the depository

 Inward MT564 message is received to update Pre Diary

SC.PRE.DIARY and create Diary

Below are the new features added:

 Notification on receipt of initial MT564

 Notification based on status code – Processing status
 Further updates based on subsequent MT564
 Eligible clients
 Manual creation of Diary

Slide 179
MT567 MESSAGE

 Purpose of MT567 – is sent by an Account servicer (custodian / sub

custodian) to Account owner to advise the status of a Corporate Action
 Used to advice the status of the MT565 . Election of the nominals of
the entitlement by the customer -
 It is also used to provide a reason as to why a Corporate Action event is
not completed within the announced payment dates.

 MT567 STATUS CODES

IPRC / PACK – Instruction has been processed
EPRC / PEND – Processing has not been completed
CAND / CSUB – Cancelled by Sub custodian
CANP / DQCS – Disagreement on cash amount

 SC.CA.ERROR.LOG now captures details of MT567 incoming messages

 Details are updated in SC.PRE.DIARY

Slide 180
SC.PRE.DIARY

 Id format prefixed by - SCPDIA

 Details available
 Security
 Type of event
 Ex date of the event
 Depository information
 Rate or ratio at which the benefits are applicable

 The OFS process further creates the DIARY/ENTITLEMENT as per the

setup in the DIARY.TYPE record for the event

Slide 182
DIARY

 Either from SC.PRE.DIARY

 When record authorised, then depending on setup in DIARY.TYPE, creates
a record in DIARY through OFS
 Event details mapped from SC.PRE.DIARY into the DIARY

 From external feed through OFS

 Manual/Direct input

 During COB by the system, the routines for Coupons/Redemption to be

defined in SC.PARAMETER with start and end dates
 EOD.DIV.AUT.REQ and EOD.AUT.REDEM.REQ Fields

Slide 183
Diary Input Details

 Id format is prefixed by DIARSC

 Definition of the declaration of the event

 Security details
 Event
 Rate
 Option
 Ex date
 Value date

 Security details
 The stock for which the event has been declared

Slide 184
DIARY

 Event
 As defined in the file DIARY.TYPE

 Based on the definition in the DIARY.TYPE we have the following

details to be input:
 Cash Option
Rate
 Stock Option
Sub valued details within option (joined by and)
Ratio to be given
Price for new security
RIGHTS details
 Multiple Option when both are applicable

Slide 185
Creation of ENTITLEMENT

 Created for the holdings of the security by each portfolio

 Steps for creation of Entitlement records

 When DIARY is authorised the agent XXX/SC.CORPORATE.ACTIONS is
updated with START status
 Initiate the TSM if not running in the background
 Initiate the service agent if required manually or could be auto
 Based on the setup in DIARY.TYPE record for the event ENTITLEMENTs
are created in HOLD/NAU

Slide 188
ENTITLEMENT

 If DIARY.TYPE set as verify required, then verified individually or using

SC.ENT.VERIFY

 Authorising an ENTITLEMENT
 SC.ENT.AUTHORISE
Application used for bulk authorisation
Can be authorised by depository/sub account for multiple diary
Service agents should be initiated for bulk authorisation
 Manually authorise each ENTITLEMENT record

 Manual input
 If positions eligible for the event, then manual input of a record is possible in
ENTITLEMENT using the Id of the DIARY for the event
 Replace an existing ENTITLEMENT record which was reversed

Slide 194
COB PROCESSING

 For Bond type securities Coupons and Redemptions can be partially

automated

 SC.PARAMETER
Where the from & to dates are defined then during COB, system identifies
all such events falling between these dates
Produces a warning report detailing the positions and due amounts per
security to be monitored by Back Office
On due date DIARY record is created and if the agents are running in
AUTO mode, the ENTITLEMENT record gets created for the holdings
Thereafter standard processing apply

Slide 196
ENTITLEMENT- REVERSAL

 Individual entitlement can be reversed using the reverse function

except the last one for a Depository

 Last ENTITLEMENT gets reversed only after reversal of dairy

 To reverse the DIARY record, service agents XXX/SC.CORPORATE

ACTIONS has to be initiated along with TSM

 Along with the DIARY the last ENTITLEMENT record also gets
reversed

Slide 197
Corporate Actions - MAIN TYPES

 Dividends

 Coupon/Redemption

 Stock/Cash

 Bonus

 Rights

 Reinvestment

Slide 201
Workshop - 12

 Use User Menu > Private Operations > Securities > Back Office >
Transfer Transactions > Contractual Free Receipt

 Input a share transfer in with a back value date for 5000 nominal each for
the customer and for another customer

 Use security created earlier

 Cash hold settle no and security hold settle as No

 Get the record authorised.

Slide 206
Workshop - 12 Solution

Slide 207
Workshop - 13

 Use User Menu > Private Operations > Securities > Back Office >
Corporate Actions > Diary Events > Cash Dividend Diary
 Input a DIARY record
 Event as CASH
 Type as NET
 Rate as 0.1
 EX.DATE = TODAY
 Get the DIARY authorised

 View the TSA.SERVICE record for BNK/SC.CORPORATE.ACTIONS

 Use User Menu > Private Operations > Securities > Back Office >
Corporate Actions > Entitlements > Unauthorised Entitlements
 View the two ENTITLEMENT record created
 Drill down to view the record
 Get the ENTITLEMENT record Authorised

Slide 208
Workshop - 13 Solution

Slide 209
Workshop - 13 Solution

Slide 210
Workshop - 13 Solution

Slide 211
COUPON/REDEMPTION

 Coupons have specific rates and dates defined in the

SECURITY.MASTER

 Rate can be fixed or variable

 Processing during COB is possible

 Manually also possible

 For COUPONS the processing is similar to CASH event except that:

 No rates need to be given. Picks up Coupon rate from the
SECURITY.MASTER
 Coupon period calculated from the accrual start and end dates in the
SECURITY.MASTER

Slide 212
REDEMPTION

 For REDEMPTIONS

 Possible to redeem the bond fully or partially by specifying the nominal to be

redeemed

 Redemption price taken to be 100 (par) but can be over-ridden if needed

Slide 213
Entitlement for Redemption

Slide 214
PARTIAL REDEMPTIONS – SINKING FUNDS

 For PARTIAL REDEMPTIONS

 Possible to execute partial redemption (PRED) before the maturity date

without reduction in nominal value of securities.

 This is done by pool factor reduction based on CA notification MT564 which

will include the previous factor and next factor information. In the case of
non-STP events, it is possible to input these factors manually.

Slide 215
PARTIAL REDEMPTIONS – SINKING FUNDS

 The pool factor will be part of the incoming MT564 – PRFC and NWFC
(New factor)

 The redemption amount will be Nominal *(Old factor – New factor) and it will
not impact the nominal

Slide 216
BONUS

 Typically additional shares “given” to holders on a ratio to existing

shares

 Cash set as NO

 Security update is Yes

 Involves POSITION updates

Slide 217
Workshop - 14

 Use Role Based Home Pages > Private Operations > PWM Back Office
> Corporate Actions User > SC Corporate Actions Overview > Diary
Types
 Observe the diary type BONUS

 Use Role Based Home Pages > Private Operations > PWM Back Office
> Corporate Actions User > Diary Events > Diaries > Generic Diary
Capture
 For the security position available for the customer, input a BONUS type of
event for bonus at the ratio of 1:10 for the same security

Slide 218
Workshop - 14 Solution

Slide 219
Workshop - 14 Solution

Slide 220
Workshop - 15

 Use User Menu > Private Operations > Securities > Back Office >
Corporate Actions > Entitlements > Unauthorised Entitlements
 View the ENTITLEMENT records created

 Use User Menu > Private Operations > Securities > Back Office >
Corporate Actions > Entitlements > Bulk Authorise Entitlements
 Get the ENTITLEMENT record Authorised using bulk authorisation

Slide 221
Workshop - 15 Solution

Slide 222
Workshop - 16

 Use User Menu > Private Operations > Securities > Front Office >
Security Position Enquiries > Positions by portfolio

 Indicate your portfolio, security and view the position

 Observe the updates to the SECURITY.POSITION record

 For your customer portfolio the position are settled

 Indicate other customer portfolio ,security and view the position

Slide 223
Workshop - 16 Solution

Slide 224
Stock and Cash Option

 Event having options defined as YES

 Beneficial owner able to receive entitlement as additional securities or

cash payment, or a combination of both

 ENTITLEMENT record created in IHLD to enable the user to specify

required option per customer

Slide 225
Diary for Multiple Option Event

226
Exercising Option in ENTITLEMENT

For exercising the option the field

OPTION.NOM can be used to
specify the nominal for each of
the options against the respective
multi-value.

The nominal to be retained

without the exercise can
be mentioned

The third field which can be

used when the entire .
nominal is exercised as a
single option

Slide 227
Rights

 Initially holder is given “rights to new shares” in a ratio to his existing

position, usually at a fixed cost and at future date

 The rights can then be exercised, sold or more rights bought to

increase entitlement (use SEC.TRADE)

 “Rights” will have to be defined as a separate security in

SECURITY.MASTER where the field RIGHTS is set as YES

 In the DIARY record, the ratio of Old shares to New rights and Rights to
Share ratio must be furnished

 After generation of Entitlement record, the Option of either to exercise

in full or in part or lapse to be chosen

Slide 228
RIGHTS

 ENTITLEMENT record created in the LIVE file with opt status as

“pending” with the security position for the rights security updated

 Creates with 2 options, one for the rights and other for lapsing the
rights

 Now the rights have to be exercised in the ENTITLEMENT when the

record moves to INAU. ENTITLEMENT record has the opt status
updated as COMPLETED

 Authorise the ENTITLEMENT

 Position in rights security becomes zero, and the new share position is
updated

Slide 229
Reinvestment

 Event in which the cash income is reinvested into additional shares of

the same security

 A DIARY.TYPE record can be set with REINVEST flag as Y and

CASH.REMAIN as Y

 Reinvestment can be at a price different from the market price

 Currently additional feature to input the price after exercise of option for
reinvestment
 DRIPS flag set as YES in DIARY.TYPE
 Cash remaining after the reinvestment in stock can be credited to customer
cash account or to Bank’s PL

Slide 246
Reinvestment

248
Corporate Actions - Standing Instructions

 SC.ENT.INSTR
 Can be setup for customer, portfolio
 Customers attached to a investment program could be defined

 It is possible to handle default instructions for the following events

 Rights
 Stock Cash
 Reinvest
 Odd lots

 Can be defined based on security currency and domicile

 Security
 Sub asset
 Asset
 All

Slide 275
Corporate Actions - Standing Instructions

 Rights
 RIGHTS Field has the following options
Buy more
Sell
Take up

 Stock cash
 STOCK.CASH Field has the following options
Cash
Recommend
Stock

Slide 276
Corporate Actions - Standing Instructions

 Reinvest income
 REINVEST.INCOME Field is 'YES' or 'NO' allowed.
 Used to indicate whether income amount should be reinvested or not

 Selling of odd lots

 SELL.ODD.LOTS Field contain the standing instruction to be used when
deciding whether to automatically sell any odd lots received.
 Input of 'YES' or 'NO' only

Slide 277
FATCA Withholding

FATCA Withholding includes:

 Identification of withhold able payment, calculation of withholding and posting of

taxes
 Definition of US source income and exception for grandfathered obligations
 Payees subject to withholding – non-participating FIs, recalcitrant account
holders, NFFEs that have not provided details on their substantial owners.
 Effective dates for withholding on various payments taking into account the
transitional rules
 System need to be configured to identify the proportion of US source in the
income distributed as the withholding under FATCA is applicable only on US
source income.

Slide 289
Handling amendments/reimbursements on FATCA WHT

T24 also supports adjustments for over withholding and under withholding of tax.
This functionality enables the user to:

 Record the amount of tax over withheld or reduced tax rate applicable on each
with-hold able payment

 Process the refunds to the payee for the over withholding (based on
reimbursement procedure) and link it to the original payment (transaction).
Possibility to identify the tax originally withheld and refunded is provided.

 Record the amount of tax under withheld. Recover the amount from assets in
custody or control

Slide 290
Tax Calculations in Corporate Actions

 When DIARY is defined as GROSS type of calculation, then respective

rates are applied on the ENTITLEMENT amount
 Accounting entries are raised accordingly

 When it is a NET type, then TAX.CREDIT is calculated by the system

and available for information
 No accounting takes place

Slide 291
Charges

Charges Specified in

 CUSTOMER.SECURITY

 SCTR.GROUP.CONDITION

 DIARY.TYPE
Valid FT.COMMISSION.TYPE

 System first checks to see if CS record of customer has setting

If yes, then charges based on that

 If not, looks into SCTR.GROUP.CONDITION which is generally used

 If not, then charge based on DIARY.TYPE setting

Slide 292
Corporate Actions - Accounting

 When ENTITLEMENT is authorised, then entries are raised by credit to

CUSTOMER cash account and a debit to the internal suspense
account

 When all ENTITLEMENTs are authorised including those for

depositories, then the internal account is credited with a debit to
depository account or Nostro account

 Provided UPDATE.NOSTRO Field is set to Yes for the total value of

the distribution

 GROSS or NET of commission /taxes/charges specified at DIARY

level

Slide 293
Corporate Actions - Accounting

 On authorising an ENTITLEMENT for a customer, the entries raised

are:

 DB : Internal Account SUSPENSE (STMT.ENTRY) with

(Customer.Net.Amount + Commission.Amt)

 CR: Customer Cash Account with customer Net Amount

 CR: P&L Commission Category (CATEG.ENTRY) with

Commission.Amt

Slide 294
Corporate Actions - Accounting

 When all the ENTITLEMENT depository records are authorised, then

the following entries are raised:

 CR: Internal Account SUSPENSE (STMT.ENTRY) with

(Total CUSTOMER.NET.AMOUNT + COMMISSION.AMT)

 DR: Depository account/Nostro account

Slide 295
Contractual Entitlement - Accounting

Slide 296
Workshop - 27

 Use User Menu > Private Operations > Securities > Back Office >
Accounting entries > View Transaction entries
 View the accounting entries by giving the entitlement Id for the CASH diary
created earlier

 Use Role Based Home Pages> Private Operations > PWM Back Office
> Corporate Actions User > SC Corporate Actions > Corporate Actions
Overview > Auth Entries
 Choose the diary created for STOCK.CASH event type
 Choose the Auth Ents option and view the entitlement
 View the accounting entries through context enquiries

Slide 297
Workshop - 27 Solution

Slide 298
Workshop - 27 Solution

Slide 299
Workshop - 27 Solution

Slide 300
Actual Settlement - Accounting

Slide 306
Actual Settlement - Accounting

 On completion of all the settlement records for a depository,

 Provided update NOSTRO is mentioned in the DIARY.TYPE

 CR Internal account for Corporate action suspense

 DR Depository Nostro Account

Slide 307
Actual Settlement - Accounting

Slide 308
Workshop - 28

 Use Role Based Home Pages> PWM Back Office > PWM Back Office
Operations > Settlement Analyst > Security Settlement > Settlements >
Outstanding Settlements
 Settle the nominals and cash for unsettled entitlement for the newly created
security

 Use User Menu > Private Operations > Securities > Front Office >
Security Position Enquiries > Positions by Security
 Indicate your new Security
 View position of your portfolio
 Observe the settled and unsettled position

Slide 309
Workshop - 28 Solution

Slide 310
Workshop - 28 Solution

Slide 311
Workshop - 28 Solution

Slide 312
Delivery

 Control of messages
 EB.ACTIVITY use to define and control delivery messages
 EB.ADVICES controls the output of delivery messages, the format of the
messages and deal slip formats for an EB.ACTIVITY.
Id as ACTIVITY.CODE.<DIARY.TYPE.ID>
SC-0102 - Confirmation
SC-0103 - Entitlement Reversal
SC-0104 - Diary Reversal

 MT565
 When customer exercises the option in a corporate action, message
generated to depository furnishing the details
 Message normally generated only when all the customers of the depository
have finalised their options
 It is possible to send the message as and when the options are exercised
using the application MT565.INSTRUCT

Slide 313
Non Stop Processing

Slide 323
Non Stop Processing

 During the COB, the following functionality can be continued for

corporate Actions processing
 Both Customer and Own book positions
 Create, amend and rerun a new DIARY record
 Input and amend ENTITLEMENT records created during COB
 Reversal and deletion of both DIARY and ENTITLEMENT that were created
during COB is allowed
 When Actual Settlement is on, the SC.SETTLEMENT records created as a
result of an event can also be processed
 This is however not supported for any records created prior to COB

Slide 324
Online Valuation

Slide 350
Online Valuation

 T24 – A comprehensive Portfolio and Investment Management

Application

 Any transaction or a static change that affects the portfolio value is a

trigger for the valuation process

 The real-time valuation deals with the mechanism for automatic intra-
day valuation of portfolio based on triggers

 Valuation will be performed online for select portfolios

 Several intra-day events like security price movements, security

position and account balance movements could have an impact on the
portfolio valuation

Slide 351
Workshop - 30

 Use Admin Menu > Private Administration > Securities > Parameter
files > Main Parameters > Online Valuation Parameter
 Look at the Model bank setting of this parameter

Slide 359
Workshop - 30 Solution

Slide 360
Workshop - 31

 Use User Menu > Private Operations > Securities > Front Office >
Client Maintenance > Private Customer > Private Customer >
Securities Portfolio
 Open an existing Customer SAM record from Command line
 Check the ONLINE.VAL Field to Yes
 Commit and get the record authorised

Slide 361
Workshop - 31 Solution

Slide 362
Triggers for Automatic Valuation

 Automatic valuation engine is capable of handling various types of

events

 Triggers based on static change

ex:- Haircut

 Transaction triggers
ex:- Securities purchase, transfer, Deposit, Funds Transfer, etc.

 Global triggers
ex:- Price change, currency rate change, etc.

 Triggers that impact more than one element

ex:- Securities purchase

Slide 363
Workshop - 32

 Use User Menu > Private Operations > Securities > Front Office >
Security Position Enquiries > Positions by Portfolio
 View the Portfolio Position of the customer

Slide 366
Workshop - 32 Solution

Slide 367
Workshop - 33

 Use Admin Menu > Private Administration > Securities > Static Data
and Parameters > Security Prices > Security Price Update
 Change the price of the security for which the customer has position
 Commit and get the record authorised

Slide 368
Workshop - 33 Solution

Slide 369
Workshop - 34

 Start TSM and BNK/OV.ONLINE.VAL.FINAL Service

 Use User Menu > Private Operations > Securities > Front Office >
Security Position Enquiries > Positions by Portfolio
 Once the service is run, re-look the position of the Portfolio again

Slide 370
Workshop - 34 Solution

Slide 371
Workshop - 34 Solution

Slide 372
Buying Power

Slide 373
Buying Power

 Portfolio wide view of the amount available to invest

 Summarizes the liquidity of the portfolio

 In a margin account, the buying power is the total cash held in the
account plus maximum margin available

 Additional risk of an order is covered by sufficient Buying power

 Buying Power = Cash balances + lending value of securities + margin

value of other assets – pending orders – estimation value of other
liabilities

Slide 374
Buying Power

 Execution of the order is simulated and the effects on the Buying power
are computed

 Only if the Buying power is greater than the order amount, the order will
be accepted and processed further

 Applies to all new orders as well as to the amendment of pending

orders

 Pending securities orders and other obligations reduces the buying

power

Slide 375
Buying Power

 Buying power calculation engine will determine whether there is

sufficient buying power to meet the cost of execution

 Done by simulating the execution amount and comparing it with the

buying power calculated

 If Order amount is less than Buying power, the system raises override

 Only the pending purchase orders are included in the calculation

 Potential positive cash flows on account of sell orders are not

considered

Slide 376
Buying Power

 Following events trigger the buying power calculations

 New Orders Ex:- Purchase
 Amendment of pending orders Ex:- Purchase (only for nominal or price
change)

 Events which will not trigger the buying power checks

 Sell Orders
 Cancellation of pending orders

 Buying Power will always be calculated in the reference currency of the

portfolio

 To enable Buying Power calculation, BUYING.POWER Field in

OV.PARAMETER to be set to Yes

Slide 377
Workshop - 35

 Use Admin Menu > Private Administration > Securities > Parameter
files > Main Parameters > Online Valuation Parameter
 Open the OV.PARAMETER
 Click the BUYING.POWER Field to Yes
 Commit the record

Slide 378
Workshop - 35 Solution

Slide 379
Workshop - 36

 Use User Menu > Private Operations > Securities > Front Office >
Direct Ordering > Single Orders > Order Entry > Buy Order
 Input a buy order for the Customer Portfolio
 While committing the order, find the Override generated for the same
 Commit the record

Slide 380
Workshop - 36 Solution

Slide 381
Margin Lending

Slide 382
Margin Lending

 Margin allows you to borrow against the securities in your portfolio

 Maximum amount that can be borrowed against the portfolio is called

Total Loan Value (TLV)

 TLV is determined by applying Loan to Value Ratio (LVR) assigned to

each security/group of securities/assets/liabilities in the portfolio

 TLV is also known as the Margin Value

 LVR is also known by the term Margin Rate

Slide 383
Margin Lending

 BUYING.POWER and MARGIN.LENDING Fields at OV.PARAMETER

should be set to Yes to enable Margin Lending Calculation

 At every portfolio level, MARGIN.LENDING Field should be set to Yes

for this purpose

 Two distinct uses for the setting these fields

 To determine how much can borrowed against a portfolio; and
 To determine additional securities that can be purchased without cash using
the existing portfolio.

 Customer may pay in full or borrow part of the amount from the bank
for his purchases

 Falls in the market value of the portfolio can make the portfolio value
less than the loan amount borrowed, which is called Margin Call

Slide 384
Margin Lending

 Falls in the market value of the portfolio can make the portfolio value
less than the loan amount borrowed, which is called Margin Call

 Portfolio value decreases on account of fall in the market value of

securities

 The result of the decrease in the portfolio value, TLV will be decreased

 Customer then has to deposit additional cash or bring in new securities

to meet the margin obligation within the time stipulated for clearing the
margin call.

 Sec Margin Ratio is calculated and used as a performance monitoring tool for
portfolios pledged as collateral for credit facility provided to customers by the
bank.

Slide 385
Margin Lending

 Portfolio Grouping is enabled and margin value of child portfolio can be

used by master portfolio for the facility provided to the Master Portfolio.
For Grouped Portfolios, Group Sec Margin Ratio will be calculated and
used for monitoring Group Performance.

 Bank will be constrained to “force sell” some of the customer’s holdings

in case of not addressing Margin Call

 Buffer can be given to Customer to manage the portfolios into a

suitable position
 BUFFER Field in OV.PARAMETER

 Buffer could either be a percentage of the market value or the margin

value of the portfolio

 Then the combined value, Margin + Buffer will be above the loan value,
hence no margin call required

Slide 386
Workshop - 37

 Use Admin Menu > Private Administration > Securities > Parameter
files > Main Parameters > Online Valuation Parameter
 Open the OV.PARAMETER
 Set the MARGIN.LENDING Field to Yes
 Commit the record

Slide 397
Workshop - 37 Solution

Slide 398
Workshop - 38

 Use User Menu > Private Operations > Securities > Front Office >
Client Maintenance > Private Customer > Private Customer >
Securities Portfolio
 For an existing Customer record, create another portfolio exclusively for
enabling the margin lending facility
 Commit the record

Slide 399
Workshop - 38 Solution

Slide 400
Workshop - 38 Solution

Slide 401
Workshop - 39

 Use User Menu > Private Operations > Securities > Back Office >
Online Valuation > Margin Lending Portfolios
 Find if the customer’s portfolio appears in the list
 Look at details available from the drop down of the enquiry

Slide 402
Workshop - 39 Solution

Slide 403
Workshop - 40

 Use User Menu > Private Operations > Securities > Front Office >
Direct Ordering > Single Orders > Order Entry > Buy Order
 Input a buy order for the Customer Portfolio created newly
 Give appropriate values and commit the record

Slide 404
Workshop - 40 Solution

Slide 405
Top Up and Sell Out Margin

 Applying the standard LVR, if Margin Value goes below the loan
availed on any day
 No action will be taken in case top up and sell out margins is specified

 If Sell Out level is breached, a sell-out margin call will be made

 Bank may even initiate to sell some of the securities in order to cover the
deficit

 If Top-Up level is breached, a top-up margin call will be made

 Customer will be asked to pay in more cash or reduce the cash or transfer
in additional eligible securities within a stipulated timeframe

 Buffer cannot be set if Top up or Sell Out margins are given to the
Customer

Slide 424
Third Party Custody

Slide 425
Third Party Custody

 A Custodian is a bank or other institution that holds securities on behalf

of investors

 Has also evolved into a complex business no longer characterized by

just physical book keeping of securities

 Custody services are provided by a variety of intermediaries

 Serviced done by Custodian include

 Safekeeping of securities
 Delivering or accepting traded securities
 Collecting Principal, Interest, or Dividend payments on securities held

Slide 426
Third Party Custody

 Custody can be Internal or External to the Bank

 If bank acts as Investment Manager and Custodian

 Information about portfolios can be collated and provided easily

 If custody is external,
 Portfolio Managers need to get accurate information for carrying out
portfolio analysis

 All external transactions have to be captured in T24

 With all details like brokerage, charges and the actual exchange rates

Slide 427
Third Party Custody

 Third party custody positions could be held in separate portfolios

 Can be used only for external or third party custody transactions

 Possible to have external custody positions in the same portfolio as

custody positions

 There should be a mechanism to segregate the external positions from

the custody positions
 In such case, internal and external custody have to be integrated

 The details of portfolio holdings could be seen from the SECURITY

POSITION file

Slide 428
Third Party Custody

 Setting EXTERNAL.TXN Field to Yes in SC.PARAMETER enables

External custody transactions in the bank

 External custody transactions will be identified by means of pre-defined

transaction codes
 SC.TRANS.NAME table used for this purpose
 CBY – Custody Buy , CSL - Custody Sell

 Orders can be created using ORDER.BY.CUST Application

 If No is entered in EXTERNAL.TXN Field, it denotes Custody is internal

 SEC OPEN ORDER will also support placement of orders for third-
party custody positions
 DEAL STATUS Field to be set to ‘TRADED’ so that trades will be created
directly on authorization of the order

Slide 429
Miscellaneous

456
Securities Archival Process

Slide 470
Archiving of Transaction

 Archival of all security transactions

 Parameter setup in SC.PARAMETER

 Initiating the service SC.SEC.ARCHIVAL from the ARCHIVE table

 Transaction prior to archival date are archived

 Live file TRN.CON.DATE updated with transactions details deleted

from them

 SEC.POS.BASE holds the base positions on the archival date for

subsequent rebuilding

 Securities archiving done through service.SC.ARCHIVAL

Slide 471
Depository Routing

Slide 472
Depository Routing

 Automatic transfer from one depository to another

 Possible only when ACTUAL.SETTLEMENT is set to No

 Criteria based on CUSTOMER, SECURITY.MASTER and

SEC.ACC.MASTER files

 Keyed on the Id of a valid depository

 The transferee should also be a depository

 Delivery message can be sent to both depositories

Slide 473
Stock Reconciliation

 Reconciliation of position in T24 against depository’s position

 MT549 to request statement of holdings from depository

 T24 produces MT535 from its position files and diverts them to
SR.HOLDINGS

 Incoming MT535, statement of holdings matched in T24 records

 Automatic and manual matching of holdings possible

 MT536 will be statement of transaction highly linked to MT535

message
 Generated by custodian
 MT535 and then MT536 is sent with transactions
 Balance in the next MT535 will include transactions

Slide 474
Stock Reconciliation

 MT536 is sent by an account servicing institution to an account owner

 Provides details of increases and decreases of holdings done for a

portfolio over a specified period of time

 Outbound MT536 messages generated,

 Inbound MT 536 messages are not processed

 Can be generated on a periodical basis on a set frequency or on

demand

 Possible to generate reversal of MT536 message

Slide 475
Stock Reconciliation

 PRODUCE.MT536 Field in SC.PARAMETER should be set to YES

 Maximum number of transactions that can be carried per message

 MT536 is generated at the portfolio level, frequency to be set up

 During COB processing, system selects those portfolios for which

statement generation is due
 Automatically generates a MT536 message containing list of transactions
that are done during the statement period
 System updated with the date when message was last sent
 Delivery reference of the last statement

 SC.MT536.INSTRUCT table used to generate ad-hoc messages

 DATE.TIME.FROM and DATE.TIME.TO Fields to specify begin and end
dates for transaction in statement

Slide 476
Summary

 You have now learnt to:

 Setup the parameter and static files related to settlement and corporate
actions processing in the Securities module

 Setup transaction input and processing of settlement and corporate actions

 Setup charges and tax related to the activity

 Understand Accounting and various delivery messages

 Interpret valuation of positions, Online Valuation, Margin Lending, Third

party custody

 Process and interpret revaluation of portfolios

 Setup safe custody and management fees

Slide 477
 Thank You

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