Lock Contracts Best Practices
Overview
This document applies to all releases of Eagle software V11 and above. Version-dependent functionality is noted with the initial release(s) it became available.
Eagle supports end-to-end processing of Price, Spread, and Rate Lock Contracts. This document covers the details of Accounting, Data Management, and Performance Measurement.
Entity Setup
Lock Contracts do not require any special setup above and beyond the normal requirements for creating an entity. The Add/Change Entity process can be used to add or modify entity data.
Security Data
Issue Name
Primary Asset ID & Type
Process Security Type = SWLOCK (Lock Contract)
Issue Country
Asset Currency
Buy/Sell Indicator
Maturity Date
Ability to have Lock Contracts automatically expire or mature is not currently supported
Maturity/Expiration Date can be entered, but a close transaction must be submitted to close out the position
Coupon
Coupon is for reference only
The assumption for the Coupon (Lock-in Rate) is that accrued interest will be incorporated into the Lock Contract’s price
Trade Processing
All Lock Contracts are established as long positions in Accounting. Once security reference and entity data are setup, trades can be entered using the Book Trade module under the Trade tab. The required fields for booking a Lock trade are listed below.
Open
Entity ID/Name
Security ID
Trade Date
Settle Date
Notional Principal Value
Broker
Close
The maturity process has been turned off for Lock Contracts, requiring the user to process a close transaction to close out the position.
Entity ID/Name
Security ID
Trade Date
Settle Date
Data Entry Method
Notional Principal Value
Price
Broker
Accounting
Once a Lock Contract trade is successfully booked it will follow all core Eagle Accounting processes.
Valuation
Eagle Accounting calculates the value of a Lock Contract by using the formula below:
Market Value = Notional Amount * Clean Unit Price * Price Multiplier * Quantity Scale
Reporting
STAR to PACE (S2P)
Almost all reports in Eagle Accounting 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 Lock Contract in the POSITION, POSITION_DETAIL, TRADE, and CASH_ACTIVITY tables. The MARKET_VALUE_INCOME column captures the total market value.
Accounting Reports
Eagle has a core set of accounting reports that can be used to review Lock Contract 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.
Data Management Reporting
Performance
Reflexive Flows need to be added via the S2P process in order to calculate performance.
Automation
Lock Contract trades can be loaded via default CSV and STAR Message Center streams. Loading security data for Lock Contracts is not supported. Refer to Supported Generic Interfaces V17 for more information.