Overview

The Eagle Suite supports modeling and processing both Deliverable and Non-Deliverable Commodity Forwards by setting them up as Futures without variation margin (VM). This allows Commodity Forwards to leverage the end-to-end Futures support from Message Center all the way through to Performance. The types of Commodity Forwards that Eagle has worked with previously are precious metals (gold, silver, platinum).

Refer to Futures (FUT) Best Practices for general information on processing this security type.

Pay special attention to underlined sections, as these highlight the most frequently encountered issues. Bold is used for navigation, modules, and screens. Italics are used for fields, tables, and errors. Fixed width indicates values for fields or code/text that should be entered. Tags are shown in parentheses (#) after field names.

Reference Data

Security master records can be created using Issue Viewer, Security Reference Manager, or Reference Data Center. There are two critical fields for modeling Commodity Forwards as Futures:

• Contract Size (19) = 1.00, unless your Commodity Forward has unique trading unit

• Variation Margin (4533) = No

Refer to https://eagledocs.atlassian.net/wiki/spaces/IE/pages/1658978644/Futures+FUT+Best+Practices#Reference-Data for additional details about available fields.

Entity Setup

Refer to Futures Entity Setup Processing Notes, as modeling Commodity Forwards as Futures requires the same entity considerations.

Trade Processing

Refer to the https://eagledocs.atlassian.net/wiki/spaces/IE/pages/1658978644/Futures+FUT+Best+Practices#Trade-Processing, as modeling Commodity Forwards as Futures requires the same tradeconsiderations.

Physical Delivery/Receipt

If the contract specifies that the underlying commodity be physically delivered or received upon expiration, the Accounting workflow is to run the expiration process using Global Process Center > Expirations > Expire and then settle any associated cash. The cash associated with the contract expiration represents the cash to buy or sell the physical commodity. The underlying commodity asset should be booked as a free receive or free deliver transaction in order to suppress the cash settlement. 

• For details on how to trade a physical commodity, refer to Physically Held Commodities Best Practices

Accounting

Once a Commodity Forward trade is booked, it will be picked up in Eagle’s global workflow. Accounting valuation is calculated when posting unrealized gain/loss and Data Management valuation is calculated in STAR to PACE. These can be scheduled or triggered manually.

• V17 & Above: Accounting Center > Processing and Exceptions > Global Processes

  • Accounting Valuation: Unrealized Gain Loss Entries > Post Daily Fund Unrealized Gain Loss-Position

  • Data Management Valuation: Eagle STAR to Eagle PACE Direct Processing > Transfer Data - Batch

• Prior to V17: Global Process Center

  • Accounting Valuation: Unrealized Gain Loss Entries > Post Daily Fund Unrealized Gain Loss-Position

  • Data Management Valuation: STAR to PACE Direct Processing > Transfer Data - Batch

Valuation

Futures without VM are valued at their unrealized gain/loss using the following formula:

• Market Value = URGL = Notional Market Value - Notional Cost
                        = # of Contracts * Contract Size * (Current Price - Trade Price) * Price Multiplier

Reporting

STAR to PACE (S2P)

Almost all reports in Eagle leverage data from Data Management, which is populated by the S2P process. This will be scheduled as part of the daily workflow, but can also be triggered manually as described in the Accounting section.

The S2P process creates a single row for each Commodity Forward modeled as a Future in the POSITION, POSITION_DETAIL, TRADE, and CASH_ACTIVITY tables. Notional market value and notional cost are stored on the position.

Accounting Reports

Eagle has a core set of accounting reports that can be used to review Commodity Forward information. These are designed to support the daily operational workflow for business users, allowing Grid Reports to be easily exported to Excel and customized to provide additional details as needed. Advanced Reports are intended to be client-facing and do not provide the same level of customization.

Insurance Reporting

Data Management Reporting

Performance

The performance toolkit calculates market value-based performance for Commodity Forwards modeled as Futures using data supplied by the S2P process. However, this can be misleading because Futures use notional values and typically start with a market value of zero. Exposure-based analyses, which can be implemented using Eagle Enrichment, calculate more accurate returns.

Automation

Eagle supports loading Commodity Forward (Future without VM) SMFs and trades through standard Message Center streams. The SMF must be loaded prior to the trade (trades will not automatically spawn SMF records). Refer to https://eagledocs.atlassian.net/wiki/spaces/GENERICINTER for more information.