Derivatives: End user document

Table of Contents
1. Derivatives process

2. Prerequisites

3. Create order

4. Settlement

5. Interest Rate Adjustment

6. Posting

7. Reports
1. Derivatives Process

Derivatives play an important role in interest and currency management. Reliance is taking
domestic as well as foreign loans from banks. So there are risk associated with currency and
interest rate fluctuation. To minimize that risk Client using different-2 derivative instruments. So
in the system below given products are mapped.

62A IRS Foreign Currency

62F IRS INR
62Z Str. IRS
62G Currency swaps INR
76A OTC Currency options

2. Prerequisites

Before creating an order below points are required to be maintained in the system

Business Partner
Product types
Condition types for interest calculation
Flow types
Interest Rate adjustment
Bank details of BP

3. Create an Order

Run Tcode FTR_CREATE

Fill the details:- Company Code : RCPL

Product type : 62A

Transaction type: 300 payer

Business Partner: 10023 Enter

In the Structure data tab

Fill all the entries for outgoing interest tab

Start Date 12.03.2014

End Date 14.02.2015
Nominal Amt 100000
Effective from 12.03.2014
First due date 28.07.2014
Freq. Month 6
 Fix. Interest 5
Int. Cal method act/360

Fill the details in incoming interest rate tab

Nominal Amt 100000

Effective from 12.03.2014
First due date 28.03.2014
Freq. Month 3
Int. Cal method act/360
Var Interest USD_L03M_M Enter
At other flows tab fill information

Flow type 1900

Direction + or (inflow or outflow)
Amt 10
Currency USD
Payment date 17.03.2014

Now Click on payment details Tab- Fill the information

Direction Inflow or outflow

Currency USD
Click on House bank. If you want to post in customer account then choose posting to customer

And fill house bank details.

Click on cash flow tab where you can see the details of outgoing and incoming interest
according to condition types you have mentioned.
Save the contract and it will generate a number.
3. Settlement

TCODE FTR_EDIT

In settlement process you have the rights to change, display, reversal and rollover. You can
change the conditions as well.

Put the company code and contract and settle.

SAVE

4. INTEREST RATE ADJUSTMENT

TCODE TI10

Put company code and contract no. and enter

After that put the interest rate and save

5. Posting

Tcode TBB1

Put company code

Contract no. and due date

Execute (F8)
Click on Reference key where you can see the accounting entries as well document number.
6. Reports

Journal of financial Transactions t code S_ALR_87015220

Total position with due date tcode TPM12

 Posting Journal tcode- TPM20