Forex

• TEMENOS EDUCATION CENTRE

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Copyright 2006 TEMENOS HEADQUARTERS SA

T24 Model Bank Introduction Course (T2MBIN-R5) – Forex

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 Forex – product overview

Today

Spot
TOM

Currency Normal Spot

Forex

Precious
metal Internal

Forward

Copyright 2006 TEMENOS HEADQIARTERS SA

Foreign Currencies are treated like commodities, in the sense that they have
different prices for buying and selling; the price also varies according to the date of
actual delivery. Hence, the module can deal with Currencies as well as precious
metal, which only have to be defined suitably in Currency table.
The deals can be normal – done directly with an identified counterparty, or Internal
within the organisation between dealers.
Spot deals involve the immediate exchange of one currency with another and are
most common in the market. Though, it is termed as immediate exchange, the
accepted standard for spot deals is two business days following the date of the
transaction to allow delivery time. Forward contracts are essentially a commitment
to exchange at a future exchange rate for delivery at a pre determined date in the
future. This period is greater than Spot date and is usually for one, two, three, six
and twelve months.
Today, Tom, Overnight, etc. are by-products of Spot

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 Introduction

• Model Bank Forex trading can be used for Spot and Forward
deals
• These deals could be done for Customers or could be between
two dealers to exchange their positions
• Module integrated with
– Accounting

– Limit

– Delivery

– Positions

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 Forex trader Menus

• When user logs into T24, a User Menu is displayed

• By clicking on Forex trader Menu, we can access sub menus for
– Exchange Rates
– Treasury Client Operations
– Non-Treasury Client Operations
– Authorise/Del/Rev Forex Deals
– FX Enquiries
– View Accounting Entries
– View COB Reports
• Treasury Client operations sub menu has further sub menus for
Spot Deal, Forward Outright, Split Value Deals, Precious Metal
Deal and Banks Internal Deal organised to reflect business flow
in Forex operations

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Static Tables
tables used
used in limit

CURRENCY COUNTRY

FOREX
HOLIDAY
CATEGORY

NOSTRO ACCOUNT

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CURRENCY table is used for exchange rates. COUNTRY and HOLIDAY

tables are used for checking intervening holidays for calculating Spot and
Forward dates.
NOSTRO.ACCOUNT is used to default Nostro account for receiving or
paying instructions
Each product is differentiated from the other using CATEGORY codes

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 Input details for Spot Deal

• Forex Trader menu – Treasury client operations – Spot Deal can

be used to input Spot deals for counterparties
– Spot is simultaneous buying and selling of two currencies for
prompt delivery (generally 2 working days).
• This version is designed to need mandatory inputs in fields
COUNTERPARTY, CURRENCY BOUGHT, CURRENCY SOLD,
and two of the three fields BUY AMOUNT, SELL AMOUNT,
SPOT RATE for the deal
– In case delivery is not in Customer’s account with us, then
Nostro account defaulted for routing. Customer’s instructions
regarding Bank and account number need to be indicated in
Settlement Instructions section
• Value date for the deal is defaulted for Spot deals.
– Alternately, User can input T or TO or S to indicate Today or
Tomorrow or Spot dates

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop - 1

• Use Forex Trader menu – Treasury client operations – Spot Deal

to input Spot deal for your corporate customer
– USD 19,500 Bought
– GBP 10,000 Sold
– Customer would like to received GBP in his account 123456 at
AFRIBANK (Customer No.100424 in Model Bank)
• Commit and authorise the record

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 Workshop – 1 Solution

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 Input details for Forward outright Deal

• Forex Trader menu – Treasury client operations – Forward

Outright Deal can be used to input Forward deals for
counterparties
– Forward is buying and selling of two currencies for delivery in
future, I.e. at a date later than the locally defined spot date.
– Forward period calculated from Spot date. Forward rate
normally referenced to Spot rate
• This version is designed to need mandatory inputs in fields
COUNTERPARTY, CURRENCY BOUGHT, CURRENCY SOLD,
VALUE DATE and two of the three fields AMOUNT BOUGHT,
AMOUNT SOLD, FORWARD RATE for the deal
– Forward rate could be input as (1) a rate or (2) Premium /
Discount quoted in Pips, if defined in CURRENCY otherwise
with decimal places

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop - 2

• Use Forex Trader menu – Treasury client operations – Forward

outsight Deal to input Forward deal for your corporate customer
– GBP 10,000 Bought
– 3 months forward at 1.93
• Commit and authorise the record

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 2 Solution

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 Input details for Split value Deals

• Forex Trader menu – Treasury client operations – Split value

Deals can be used to input Spot or Forward deals with different
value dates for buying and selling
– Generally bought and sold currencies are exchanged on the
same value date in case of Spot and Forward deals
– It is possible to indicate different value dates for buy and sell
currencies under this type of deals
• In versions for Spot and Forward deals, we were inputting only
one value date. Here we indicate value dates separately for each
leg

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop - 3

• Use Forex Trader menu – Treasury client operations – Split

value Deals to input Spot deal with split value dates for your
corporate customer
– USD 10,500 Bought with today’s value
– GBP Sold with Spot date value at 1.95
– Customer would like to received GBP in his account 123456 at
AFRIBANK (Customer No.100424 in Model Bank)
• Commit and authorise the record

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 3 Solution

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 Input details for Bank’s Internal Deal

• Forex Trader menu – Treasury client operations – Bank’s Internal

Deal can be used to input internal Spot deals
– Internal deals are handled differently from standard deals as
their only purpose is to allow transfers between different
positions or dealer desks
– Hence, there will not be any accounting entries, payments, and
advices
– When an internal deal is entered, the system will automatically
update the positions of both dealer desks entered into the
contract, viz COUNTERPARTY and DEALER DESK

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop - 4

• Use Forex Trader menu – Treasury client operations – Bank’s

Internal Deal to input Spot deal with Dealer F2
– USD 20,500 Bought
– GBP Sold at 1.95
• Commit and authorise the record

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 4 Solution

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 Forex enquiries

• Forex Trader menu – Treasury client operations - FX Enquiries

can be used to view the following Position related enquiries
– Position Summary
– Position Movement Entries Today
– Historical Position Movement
– Position Movement Yesterday
• Other enquiries available are
– Spot Deals – Today
– Forward Deals – Today
– Maturing Deals

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop - 5

• Use Forex Trader menu – Treasury client operations - FX

Enquiries to view the following enquiries
– Position Summary
– Position Movement Entries Today in USD for Dealer F1
– Spot Deals – Today
– Forward Deals – Today

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 5 Solution

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 Workshop – 5 Solution

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 5 Solution

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 5 Solution

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 COB reports

• COB reports are available to view

– FX Position Report
– Asset Liability Revaluation Report
– FX Revaluation Summary
– FX Revaluation Detail

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop - 6

• View the following COB reports

– FX Position Report
– Asset Liability Revaluation Report
– FX Revaluation Summary
– FX Revaluation Detail

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 6 Solution

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 6 Solution

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 6 Solution

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Workshop – 6 Solution

Copyright 2006 TEMENOS HEADQIARTERS SA

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 Forex links

Limits Commission Broker Customer

Currency
Precious metal
FOREX

Spot Our Paying Account

Forward Our Receiving Account

Split value date

Copyright 2006 TEMENOS HEADQIARTERS SA

Next to Customer, Account is central to all other applications in T24.

Accounts are needed for settlements
As soon as a Forex transaction is committed, System checks limit
sanctioned, if any to the Customer for Forex transactions.
In case of non availability of limit or inadequacy, it generates suitable
overrides.
Accounting entries are prepared during Close of Business.
Delivery messages are generated and sent according to delivery dates

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 Summary

• You have gained understanding of some important features of

Forex Operations.
• You have learnt how to input Spot, Forward and Split Value
dated Foreign Exchange Deals in T24 Model Bank and view
related enquiries.
• You have seen how to this application is integrated with
– Core - Customer, Account, Limits, Delivery, Accounting and
– Other static tables like CURRENCY, NOSTRO ACCOUNT etc

Copyright 2006 TEMENOS HEADQIARTERS SA

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