T24 Money Market

TEMENOS EDUCATION CENTRE

NOTICE
These training materials are the copyrighted work of Temenos Headquarters SA and other companies in the TEMENOS group of
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prosecuted to the maximum extent possible. Such training materials shall not be represented, extracted into or included in part, or
in whole, as part of any other training documentation without the express permission of the Copyright Owner, which must given in
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must be displayed on any and all documentation accrediting the Copyright Owner with having copyright over the materials. End-
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training purposes.

Without limiting the foregoing, copying or reproduction of the training materials in part or in whole to any other sever or location for
further reproduction or redistribution is expressly prohibited, unless such reproduction is expressly licensed by the Copyright
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Copyright © 2010 Temenos Headquarters SA
Money Market - Objectives

To Introduce the participants to T24 Money Market Module

To learn about linkages with core tables including interest, charges and
commissions

To learn to set up parameter tables connected with this module

To learn to input, execute and complete different types of Money

Market deals

To learn about risk management, accounting and messaging, as

appropriate to this module

To learn to use reports and enquiries relevant to this module

MM - Product Overview

MM
Deposit / Loan

Call / Notice Fixed period

Principal Interest Principal Interest

Fixed Floating Rollover Fixed

Bullet Bullet
Floating
Frequency
Manual
Partial Partial Periodic
repayment Liquidate Defer repayment
Automatic
Bullet
Capitalisation
Capitalisation

Yes No Yes No
MM Dependencies

MM makes use of
CUSTOMER
ACCOUNT

Core dependencies
Delivery
Accounting
Limits

MM also uses other Static tables

MM Dependencies – Product Related

Category codes are shared with Loans and Deposits module. Ranges
are hard coded
21001 - 21029 Deposit
21030 - 21039 Taking
21040 - 21044 Fiduciary Deposit
21045 - 21049 Sundry Deposit (No Interest)
21050 - 21074 Loan
21075 - 21084 Placements
21085 - 21089 Fiduciary Placement
21090 - 21094 A/C Receivable (No Interest)
MM Dependencies - Interest Related

Floating interest BASIC.RATE.TEXT

BASIC.INTEREST

Possible to set a negative interest rate for MM

A contract may be set to allow negative rate or not
Also possible to give a negative spread

The interest rate works out to –7.75% in this case

If Negative rate not allowed, and spread is +2.5,
effective rate will be +2.5%
MM Dependencies - Interest Related

Periodic interest

Bid rate for Deposits

Offer rate for Loans

Offer rate to be greater

than Bid rate
Negative rate input
allowed. Applications to
use them to be specified
(DX,MM,SW)

Generated daily.
Back dated changes possible

In MM, Used for

Automatic Rollover and
Interest tolerance checking
MM Dependencies – Charges and Commissions

In MM contract, these
Codes
can be input directly
MM Dependencies - Settlement Related

1. CUSTOMER.SSI SPVCN Order can be changed

through ACCOUNT.PARAMETER

2. SEC.ACC.MASTER
Draw down and liquidation accounts
have to be only in contract currency
3. AGENCY
for VOSTRO and CUSTOMER options Interest liquidation account can
be in currency chosen in Int Ccy Field
Both the currencies should have
4. CUSTOMER.CCY.ACCT
been pre defined as Equivalent Ccy
and Interest should not be capitalised
5. NOSTRO.ACCOUNT
Exchange rates of Int Ccy Mkt applicable

INTERNAL SUSPENSE ACCOUNT

(as defined in Account.Class under
SUSPLMMCR / SUSPLMMDR)
MM dependencies – Currency Related

Different Interest day basis for calculation of interest possible

depending on the methods followed for calculating number of days and
days in a year

Basis "S" can be used for providing a special interest amount like rounding
to the higher tens
Possible only for Fixed interest type
Interest amount proposed is also entered along with fixed interest rate
An override will be required where the tolerance is greater than 1%; and a
variance greater than 5% will be rejected
MM Dependencies – Currency Related

COUNTRY

HOLIDAY
CURRENCY.PARAM

CURRENCY CURRENCY.MARKET

While inputting a contract, the holidays for the country of the dealing
currency will be checked for scheduled activity and suitable overrides
generated
The Interest Day Basis will be defaulted from Currency table to the
transactions. Possible to change at contract level
Application Specific Parameters
MM - Parameter Tables

Parameter tables to be set-up during implementation are given below

LMM.INSTALL.CONDS

LMM.ACTIVITY

LMM.ADVICES

LMM.TEXT

MESSAGE.CONTROL

ACCOUNT.CLASS
LMM.INSTALL.CONDS

Common parameter table for LD and MM

Major groups of Fields relevant to MM are

Days before reports

P & L category codes to be used

Accrual cycle for contracts in local and foreign currencies

Daily or monthly

Accrual cycle for floating rate contracts

Daily or whenever the rate changes

Should the system include First day or Last day or Both days for Accrual
process, indicated in ACCRUAL.PARAM Field
LMM.INSTALL.CONDS

Other important Fields

Whether additional advice required when a contract to be rolled over is

amended

Whether MT202 message needed instead of 103 if the counterparty is a

non-bank

Interest rate entered in INT.TOLERANCE Field will be checked for tolerance

in case of absence in PERIODIC.INTEREST Table
LMM.ADVICES

Various events in the life cycle of a MM contract are hard coded and
detailed in LMM.ACTIVITY

In LMM.ADVICES, product wise, type of advice (s) to be produced for

any activity

For some activities, it is possible to produce the advices prior to the

activity – like advice to claim Principal / Interest / Commission
LMM.ADVICES

Other ways in which this table can be put to use are

Option to mature Money market deals at Start of day by inputting Yes in

Field MATURE.AT.SOD
LMM.TEXT

When settlement instructions of counter party are not known, proceeds

are kept in internal suspense accounts

Advice text printed on confirmations are specified in LMM.TEXT

Id of the record is the Category code mentioned in ACCOUNT.CLASS

for SUSPLMMCR and SUSPLMMDR
MESSAGE.CONTROL

MESSAGE.CONTROL table contains the basic message for passing

through to the delivery system whenever an application requests the
delivery of an advice/confirmation or payment

MESSAGE.CONTROL table allows user the flexibility of specifying

various combinations of priority status (normal, urgent or priority) and
delivery method (Swift, Telex or Print)

On Sundries and Account Receivable Delivery link must specify PRINT

or TELEX device because SWIFT confirmations require interest
conditions (MT320)
MM Build Sequence

1. ACCOUNT.CLASS * Mandatory *
Records
SUSPLMMCR, SUSPLMMDR Optional
MERGEMM

2. LMM.ACTIVITY *

3. MESSAGE.CONTROL

4. LMM.ADVICES LMM.ACTIVITY

5. LMM.INSTALL.CONDS *

ACCOUNT.CLASS *
6. LMM.TEXT * SUSPLMMCR, SUSPLMMDR
MM - Product Features
Products Handled

MM.MONEY.MARKET - application to process Loans as well as

Deposits of a bank

MM.PAYMENT.ENTRY - application to Input manual payment entries

MM.RECEIPT.ENTRY - application to process a receipt for a MM

contract

Assets include Loans, Placement and Account Receivable

Liability products include Deposits, Taking and Sundry deposits

Multi-level input allows

basic deal inputs at front office
full settlement instructions at mid office
confirmation matching for customer and broker at back office
Product Features

MM application can be used for Straightforward but flexible processing

Interest
Always in arrears
Allows Fixed or floating
Term
Call, Notice or Fixed
Repayment
Partial or total
Also possible to roll over into new deal period
Brokerage
With or without
Product Features - Schedules

Automatic schedule

Bullet type of payment for principal at the end

Can schedule increase / decrease or effect adhoc repayments

Interest at the end or during roll over

At the time of roll over, interest could be paid or capitalised

Periodical frequency for Interest for Call and Notice mandatory

If interest is not proposed to be paid, then could be deferred
If interest is proposed to be liquidated, then could also be capitalised
Product Features - Tenor

FIXED
Maturity date is a specific date
number of days (D), weeks (W) or months (M) from the value date

CALL/NOTICE
Maturity date is a number in the Range 0 to 999
0 = Call
1 to 999 = Number of Days Notice
Sundries and Account receivables, only Call maturity accepted

Holiday table of country of currency involved in the transaction will be

checked to ensure maturity date is a working day
Product Features - Interest Types

FIXED 1

FLOATING 3

NONE 9

Periodic interest could be used while rolling over.

Rollover int rate Field could have :

'Pnn', 'PnnB', 'PnnO' or 'PnnS' where
P - signifies that the Periodic Interest Table to be accessed
nn - the Sequence Number on the Periodic Interest Table
B - 'Bid' Rate must be used ; O - 'Offer' Rate must be used
S - INT.SPREAD.1 value will be applied to the Periodic interest rate for
fixed rate contracts
Workshop - 1

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Front office > Money Market Trader > MM Takings/Deposit > Fixed
Maturity Contracts
Input a deposit of USD 10,000 for a period of 3 months at a fixed interest of
2% for your corporate customer and dealer desk created earlier
Commit and get the record authorised

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Front office > Money Market Trader > MM Takings/Deposit >
Rollover/ Amend Fixed period Contracts
Select your record to effect the following changes
Principal should be repaid to another account with your bank
Commit and get the record authorised
Workshop - 1 Solution
Workshop - 1 Solution
2
1

3
Workshop - 2

Use User Menu > Treasury Operations > Forex & Money Market
Trader > Front office > Money Market Trader > MM Placements/Loans
> Fixed Maturity Contracts
Make a placement of USD 1 million with a counterparty bank for 3 months.
Placement is at a floating interest of Base rate minus 1.25 percent
Make the placement through your Broker
Commit and get the record authorised

Use User Menu > Risk Management > Limits > Enquiries > Liab
Enquiry
Look at liability for the customer

Use User Menu > Treasury Operations > Forex & Money Market
Trader > Back office > Accounting Enquiries > View Transaction
Entries
Look at the accounting entries for contracts in Workshop 1 and 2
Drill down to look at the brokerage paid
Workshop - 2 Solution

2
Workshop - 2 Solution

2
1

4
Workshop - 2 Solution

7 8

9
10
Workshop - 2 Solution

11

12

13
Workshop - 3

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Position Management Enquiries > Cash Flow Enquiry
For the Money market dealer desk you are using, and for USD currency,
look at the enquiries for the cash flow

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Position Management Enquiries > Interest Mismatch (Gap) Position
View the position for USD and your dealer desk
Workshop - 3 Solution

3
Workshop - 3 Solution

3
Workshop - 3 Solution

3
Workshop - 4

Use User Menu > Treasury Operations > Forex & Money Market
Trader > Front Office > Money Market Trader > MM Placements/Loans
>Call/Notice Contracts
Input call loan of USD 300,000 with a floating interest rate with a spread of
0.5%
Defer the interest
Interest payment frequency as once a month

Use User Menu > Treasury Operations > Forex & Money Market
Trader > Front Office > Money Market Trader > MM
Placements/Loans> Call/Notice Contract
Input 10 day notice loan of USD 200,000 with a fixed interest rate of 4
percent. Liquidate the interest but capitalise
Interest payment frequency as monthly
Get both the records authorised
Workshop - 4 Solution

1 2
Workshop - 4 Solution

3
Workshop - 5

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Back office > Accounting Enquiries > View Transaction Entries
View the accounting entries generated for contracts in Workshop 4

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Position Management Enquiries > Interest Mismatch (Gap) Position
Look at Enquiry position Gap
Workshop - 5 Solution

32
Workshop - 5 Solution

5
Workshop - 5 Solution

6 7

9
Workshop - 6

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Front Office > Money Market Trader > MM Placements/loans >Fixed
Maturity Contracts
Input the following Term loan of USD 250,000 for 3 months with a floating
interest rate with a spread of -0.25 percent for your individual customer
Commit and get the record authorised

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Front Office > Money Market Trader > MM Placements/loans >
Amend/Rollover Fixed Period Contracts
Select your above record. Set the loan for auto rollover at the end of four
month period for every month. Fix the final maturity as 12 months.
Interest is also to be automatically capitalised
Collect charges from this customer
Commit and get the record authorised
Workshop - 6 Solution

1
2
Workshop - 6 Solution

2
Workshop - 7

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Front Office > Money Market Trader > MM Takings/Deposit > Fixed
Maturity Contracts
Accept a deposit of USD 25,000 from your individual customer for 12
months with an initial interest rate of -3% by allowing negative interest
Set it to be automatically rolled over after every 2 months. Interest to be
picked from PERIODIC.INTEREST
Commit and get the record authorised

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Back Office > Accounting Enquiries > See Forward Entries
Look at the forward entries
Workshop - 7 Solution

1 2
Workshop - 7 Solution

2
1

3
Product Features

Sundry Deposit
Simple one-shot deposit
No interest to be paid
Maturity will be on call basis
Allow bank to record amounts due to clients

Account Receivables
Simple one-shot Loan
No interest will be received
Maturity will be on call basis
Allow bank to record amounts to be received from clients

On Sundries and Account Receivable, the Delivery link must specify

PRINT or TELEX device because SWIFT confirmations require interest
conditions (MT320)
Product Features

Amendments to Contracts
Interest Rate / Spread
When rolled over
Charges
Can be collected

Manual Rollover
Enter new maturity date
Old maturity date defaults as date for rollover
Rollover Marker Field has two options
”1” - Maturity date extension (No interest action)
“2 “- Rollover with interest settlement (Liquidate or Capitalise)
Workshop - 8

Use User Menu > Treasury Operations > Forex & Money Market Trader
> Front office > Money Market Trader > MM Takings/Deposit >
Rollover / Amend Fixed Period Contracts
Pick out the contract number opened in Workshop – 1
Extend maturity by 3 more months
Reduce Principal by 5000 and increase interest rate to 3% with effect from
the rollover date
Commit and get the record authorised

After authorisation, see the change in the TOT.INTEREST.AMT Field

and the values in NEXT.INT.AMOUNT and NEXT.PRIN.AMOUNT
Fields
Workshop - 8 Solution

3
Workshop - 8 Solution

4
Product Features

Payments before maturity

For simple cases

PRIN.INCREASE and INCR.EFF.DATE Fields could be used for partial
repayments
Maturity date Field could be amended for full repayments
Product Features

MM.RECEIPT.ENTRY
Used when Counterparty prepays loan principal or interest or both
Value date is either today or before today

MM.PAYMENT.ENTRY
Used when Counterparty requests prepayment of Deposit
Is for Principal only
Value date is either today or before today
Also contains details of any automatic payments made
Product Features - Others

COB input
New MM contracts can be input during COB provided NS has been installed

SOD maturing
MM deals can be matured at start of day
MATURE.AT.SOD Field in a contract can get default value from
LMM.ADVICES or inputter exercises option by filling Yes / No

On line maturing
Back-valued contracts can be matured during the day if the background
phantom is running
Through Function Verify in EB.PHANTOM for record
BNK/MM.ONLINE.MAT Service
All accounting entries passed during the day but delivery messages will not
be produced
Product Features - Others

Tax on deposits
Could be collected by inputting multiple pre-defined TAX code in the
TAX.INTEREST.KE Field. Beneficiary will get interest less this tax. Tax
amount credited to internal account defined in TAX record
To default TAX code
Possible to set TAX.TYPE.CONDITION in which different Tax codes could
be linked to different groups defined in APPL.GEN. CONDITION. Tax
Type Condition Id could be input in TAX.INTEREST.TYPE Field
SWIFT Messages supported

SWIFT Description Field Name

MT320 Confirmation for Fixed
period contracts

MT330 Confirmation for Call /

Notice contracts

MT103 Bank Transfer - Client When the counterparty is not a Cpty 202 Msg Field
bank, there is option to produce in LMM.
MT 103 or MT 202 INSTALL.CONDS
MT202 Bank Transfer - Bank

MT210 Advice to receive

Other features
Money Market Enquiries

Position Enquiries

PM.CAS
Cash Flow / Liquidity Position - daily analysis of net, in & outflows +
cumulative balance including forward interest movements

PM.GAP
Interest rate gap and break-even enquiry
Money Market Enquiries

General Enquiries

MM Events To Date
Money Market events enquiry

List of Call/Notice placement

Details of Call/Notice placement made by the counterparty

List of Fixed Term Placements

Details of Fixed Term Placements made by the counterparty

List of Call/Notice Takings

Details of Call/Notice Takings made by the counterparty

List of Fixed Term Takings

Details of Fixed Term Takings made by the counterparty
MM Reports

Money Market Maturity Report

Money Market Payments Report

MM Dependency Diagram

CUSTOMER FT.COMMISSION.TYPE
CATEGORY BASIC.RATE.TEXT FT.CHARGE.TYPE
ACCOUNT BASIC.INTEREST
LMM.INSTALL.CONDS
CURRENCY INTEREST.BASIS
CUSTOMER.SSI PERIODIC.INTEREST
SEC.ACC.MASTER MM
CUSTOMER.CCY.ACCT
AGENCY
NOSTRO.ACCOUNT LMM.ADVICES LMM.ACCOUNT.BALANCES
ACCOUNT.CLASS LMM.ACTIVITY LMM.SCHEDULE.DATES
LIMIT LMM.TEXT LMM.SCHEDULES
COLLATERAL
LMM.SCHEDULES.PAST
LMM.HISTORY.LIST
Summary

We have so far seen

Dependencies and linkages between MM module and T24 Core and other
applications

Main business features of the Money Market module

Thank You
TEMENOS EDUCATION CENTRE
NOTICE
These training materials are the copyrighted work of Temenos Headquarters SA and other companies in the TEMENOS group of
companies (The Copyright Owner). The training materials contain protected logos, graphics and images. Use of the training
materials is restricted solely for use by licensed end users, partners and employees. Any un-licensed reproduction by any means,
redistribution, editing, transformation, publishing, distribution, or public demonstration of the training materials whether for
commercial or personal gain is expressly prohibited by law, and may result in severe civil and criminal penalties. Violators will be
prosecuted to the maximum extent possible. Such training materials shall not be represented, extracted into or included in part, or
in whole, as part of any other training documentation without the express permission of the Copyright Owner, which must given in
writing by an authorised agent of the Copyright Owner to be valid. Where such permission is given a clear and prominent notice
must be displayed on any and all documentation accrediting the Copyright Owner with having copyright over the materials. End-
user licenses will in no event contain permissions extending the use of these training materials to third parties for commercial
training purposes.

Without limiting the foregoing, copying or reproduction of the training materials in part or in whole to any other sever or location for
further reproduction or redistribution is expressly prohibited, unless such reproduction is expressly licensed by the Copyright
Owner
Copyright © 2010 Temenos Headquarters SA