Create a Certificate of Deposit

Certificates of deposit are short-term zero-coupon security. It only has two flows: an initial drawing at the start date and a repayment at the maturity date.

In Fairways Debt, the certificate of deposit has a generic counterparty called Market.

 

Prerequisite

 

Navigate to the Debt & Derivatives Application
  1. Log in to your Fairways Debt account, e.g. https://login.financeactive.com/eu.
  2. Select a customer account.
  3. Navigate to Applications > Debt & Derivatives.

 

Create a Certificate of Deposit
  1. Open an issuing program with the Certificate of Deposit bond type.

Portfolio_EN.png

  1. Navigate to Bonds.
  2. Click Add Bond > Create Certificate.

IssuingProgram_Bond_AddBond_EN.png

  1. Complete the form with all relevant details.

Note: Fields marked with an asterisk * are mandatory.

Field

Description

Transaction Reference Code

Identifies the transaction in the portfolio.

Note: The reference must be unique among all the entities managed in the account.

External Reference Code

Used by external systems to identify the transaction. Used when transactions are imported from or exported to another system.

Principal

Principal amount.

Currency

Reference currency.

Issuing and Paying Agent

A third party, usually a commercial bank, which accepts the payments from the issuer and then distributes the related amount to the holders of the bond.

Note: The issuing and paying agent is by default the same as for the issuing program.

Transaction_EN.png

Field

Description

Trade Date

Date at which the transaction has been traded. From that date, the system takes the transaction into account as an item of the portfolio.

Start Date

Unadjusted start date of the transaction.

Maturity Date

Unadjusted maturity date of the transaction.

Dates_EN.png

Field

Description

Yield

Annual yield of the certificate.

Spread

Spread (or margin) value in percentage.

Day Count Convention

Used to compute the day fraction of an interest accrual period.

In Advance Interest Payment

Defines whether the interest amount should be paid at the start of the period.

If enabled:

  • The initial drawing amount of the certificate is equal to the principal amount minus the interest amount.
  • The repayment amount is equal to the principal amount.

If disabled:

  • The initial drawing amount is equal to the principal amount.
  • The repayment amount of the certificate is equal to the principal amount plus the interest amount.

Note: If enabled, the With Discount field becomes available.

With Discount

Note: This field is only available for in-advanced interest payments.

Applies a discount rate on the payments.

Indexation_EN.png

Field

Description

Interest Calculation Adjustment

Adjustment mode for the interest calculation. The nominal start and end dates of the accrual period will be adjusted accordingly before computing the interest amount.

Payment Date Adjustment

Adjustment mode for the payment date.

Payment_EN.png

  1. Enable Show Details after Validation to automatically open the new certificate profile once created.
  2. Click Apply.

CertificateOfDeposit_Create_EN.png

The new certificate of deposit displays in the draft portfolio.

CertificateOfDeposit_Created_EN.png

 

Adjustment

Adjustment modes define how the system rolls dates in case of holidays in the calendar.

Field

Description

Unadjusted

Not rolled.

Preceding

Rolled to the previous business day.

Following

Rolled to the next business day.

Modified Preceding

Rolled to the previous business day, only if that day occurs in the same month. Otherwise, rolled to the next business day.

Modified Following

Rolled to the next business day, only if that day occurs in the same month. Otherwise, rolled to the previous business day.

End of Month (unadjusted)

Rolled to the last day of the month.

End of Month (preceding)

Rolled to the last day of the month, then adjusted to the previous business day.

Modified Following (year)

Rolled to the next business day, only if that day occurs in the same year. Otherwise, rolled to the previous business day.

 

What's Next?
Related Documentation
Was this article helpful?
0 out of 0 found this helpful