Introduction to Facility

The Facility module in AA.PRODUCT.LINE provides high-level definition of the business components (Property Classes) required for Facility Product Line. The Product Lines are defined by Temenos Transact and cannot be modified. The financial institution then uses the business components to build individual Facility product based on the customer target segment requirements.

The below Property Classes are applicable to the Facility Product Line.

The Account Property Class is used by all products, which are account based. This Property Class primarily controls the description of the account. The Account Property allows the user to define and control balance treatment, posting restriction, linked account number (for memo accounts), currency market, date convention related setup for the account.

Although the account names are account specific, generic titles can be defaulted from the product and can be replaced or given additional detail at the arrangement level. Each Temenos Transact product defined and processed in Arrangement Architecture (AA) can have a single ACCOUNT Property defined.

The Accounting Property Class is used by all products. AA uses activity-based accounting. Each Property has different actions, which require accounting. For each action, a corresponding allocation rule definition is required. Allocation rules can be defined either at Property or Property Class level. The categories to which the interest or charges have to be posted are also defined in this Product Condition. In Model Bank, the charges are amortised.

The Activity Presentation is an optional Property Class that allows to define versions used for various Properties during arrangement activities. The versions can be defined at Property Class, Property and Activity levels.

The Activity Mapping Property Class provides the link between external applications and arrangement activities when a transaction is performed on an arrangement account. A debit or credit to an arrangement account triggers the applications such as, Funds Transfer, Teller, Clearing, and so on, which are linked by relevant transaction codes using this Product Condition.

The Activity Messaging Property Class is used to link the Soft Delivery module to AA module. Messages are sent based on the role and activity performed on an arrangement. This record allows either specific Activities or Activity Classes to be defined and linked to the records of EB.ADVICES.

The Activity Charge Property Class defines the charges that has to be applied when a particular activity is triggered on the arrangement. The charges so applied can be made due, capitalised or deferred. In the model bank, for a Term Facility product Upfront Fee and Coordination Fee are applied when a new arrangement is created.

The Alerts Property Class is used by all products. It enables alerts to be sent to the customer for various activities in an arrangement. Alerts can be subscribed at the arrangement level by using EB.ALERT.REQUEST. Multiple owners of the arrangement are allowed to subscribe different alerts on that arrangement. The subscription of alerts can be restricted based on the role of the customer in that arrangement.

The Balance Maintenance Property Class allows the user to capture bills and balances and adjust the balances of the bill for the contracts, which have been taken over from existing legacy system or Temenos Transact Lending module into Temenos Transact AA module. The actions such as, CAPTURE.BILL, ADJUST.BILL, and so on, help in capturing the bill and its balances into the new system.

The Closure Property Class defines the rules and behavior for processing closure of an arrangement. An arrangement account can be closed automatically or manually and it is defined in the product condition. On reversal of a new arrangement, closure is triggered automatically.

The Change Product Property Class is used by all products, which allow for a change of product during their lifecycle. When a new product is applied to the existing arrangement, the user loses all the negotiations done as part of the old product. This table allows a list of products to which the old product can change and also define time-scales as to when the event should happen.

The Customer Property Class is used by all products. This Property Class is used to define all the parties involved in an arrangement and their respective roles. The customer is always defined at the arrangement level. Each arrangement can have one or more legal owners defined in OWNER.

The Eligibility Property Class is used to evaluate eligibility of a customer for a specific product based on a set of rules. The eligibility evaluation is triggered at a given frequency or when there is a static change for the customer. In Temonos Transact, first the EB.CONTEXT has to be created. Based on this, rules are defined using Rules Engine. Once these rules are validated, the EB.RULES.VERSION and EB.RULES are created in the system.

Evidence (Covenant and Conditions) Property Class refers to conditions, which a borrower must comply with to avail a Facility or a Loan. A Covenant must be valid throughout the life of an Arrangement (for example, Deal or Facility) and it must be validated on a certain frequency. A Condition must be true for certain activities to occur. Evidences is validated during creation of a new arrangement, update activity and closure of activity. Evidence Property Class is applicable for Deal, Facility and Drawing Product Lines and it is an optional Property Class.

The evidence requirement is captured in EV.EVIDENCE.REQUIREMENT. The category of the evidence requirements are created in EV.REQUIREMENT.CATEGORY (virtual table). The consequences are the actions taken by the bank in situations where the covenants and conditions are not satisfied. So, the consequences are tagged to AA.ACTION for which the activity type is configured as Evidence Check in the relevant record of AA.ACTIVITY.CLASS.

The Limit Property Class primarily controls the use of Limit module by the product. The user can set up single or shared limit and can define Limit Reference applicable for a specific product such that the same is set as default in an arrangement. For a new limit, at the arrangement level, the user should provide New in the Limit Serial field. Further limits can be set to use the Limit module or it can be managed only within the arrangement architecture framework.

The Officers Property Class enables the user to define:

• Product
• Arrangement specific officers
• Officer’s roles
• Primary officer
• Additional officer

Each Temenos Transact product defined and processed in AA can have a single OFFICERS Property defined.

The Payoff Property Class is used to produce a payoff statement, which is given to a customer when a loan payoff is considered. It shows the current status of the account, including the updated accrued interest and penalty applicable, if any. An expiry date can be defined for the payoff statement and the loan statement shows the additional daily interest to be charged till the expiry date. The payoff amount is calculated by using the simulation framework.

The Payment Schedule Property Class is used by all products which have amounts billed (that is, made due or capitalised or pay). A Payment Schedule can be comprised of one or more payment definitions with conditions such as, payment type and method, arrangement properties, dates and amounts. The AA.PAYMENT.TYPE file is used to define the standard payment types such as, Constant, Combine Bill and Combined interest, and so on, which can be used by a product. This payment type is then attached to each payment schedule definition. The start and end date can be specified. The user can specify the repayment of arrangement to commence after ‘n’ months from the arrangement date or ‘n’ months before the maturity or ‘n’ months after the change product or reset and rollover has happened.

The Pricing Grid Property Class applies to the Facility and Lending Product Lines. The Pricing Grid Property Class provides a mechanism to define the criteria used to determine the margin(s) or spread(s) for interest or fee that apply to base rates at the various levels of the credit agreement such as, deals, facility and drawing. Pricing Grids can be configured by selecting criteria, which is used to determine the margin (for interest) and/or the rate (for fee) to apply to a Property. A Pricing Grid is comprised of elements that determine the criteria for one or more elements to specify what is set on the interest condition. The user can select both the user-defined data criteria and their order of precedence. Grids can be defined at the deal, facility and/or drawing levels.

• Deal level Pricing Grids defines the rates for Deal level fees.
• Facility Level Pricing Grids defines the rates for Facility level fees and the margins for drawings level interest.
• Drawing Level Pricing Grids defines the margins for drawings level interest.
• Pricing Grids that are defined for Facility level can be negotiated at the Drawings level

The Payment Priority Property Class is used by Facility Product Line to define the order in which the combined repayment is allocated between the facility dues on the facility and dues on drawings under the facility. Combined payment received at the Facility level is allocated to individual Drawing arrangements based on the rules defined in this Property Class. The user can create multiple drawings under a single Facility and the bills will be combined at facility level. The user can make a single payment using Facility arrangement and is allocated to each drawings based on the rules set in Payment Priority. The priority is based on different factors such as, Product Group, product, bill date, bill type and so on.

The Settlement Property Class is used for various Product Lines to control the settlement related functions of all the Product Lines. Settlement can be handled by linking any Temenos Transact account, the account and bank details of another bank by using Direct Debit and beneficiary of the customer. The Default Settlement Account is considered as the default account for both Pay-in and Pay-out Activities, if the Pay in or Pay out account is not specified. But, if the accounts are specified for the Pay-in or Pay-out, then those accounts precedes over the specified default settlement account.

The Sub-Arrangement Property Class allows the user to define the conditions for the Sub Arrangements (drawings) of the facility. The Sub-Arrangement Rules Property Class is available for the Facility Product Line. This Property Class enables to set rules for the sub-arrangements under a master arrangement.

It is attached to the Facility product to control the allowed customers, currencies and products of the drawings under the Facility. Similarly, it is attached to the Deal product to control the allowed customers, currencies and products of the facility and drawings under the Deal.

The Sub Arrangement Condition Property class is used to define condition or validation for processing or creating Drawing Arrangements. Banks can define various criteria in Sub-Arrangement condition either at deal or facility level. When a drawdown is created under a Facility, the system validates against the conditions and raises override or error message whenever any condition is breached.

The Statement Property class is used to define the legacy ACCT.STATEMENT feature at AA level. Statements may be produced daily (every working day), every 1-9 weeks, twice a month (on the 15th and the last day of the month) or every 1-12 months on any day of the month. Up to nine statement cycles may be specified for each Account and each statement cycle is independent. In addition to this, special interim statements can be enabled. This property class also controls if advices are to be produced or not, when interest and charges are applied, and whether detailed interest statements (interest scale) should be produced.

The Term Amount Property Class is used by financial products which involve an amount of money that is lent for a specified period of time. This property class controls the commitment made by the bank to the customer.

Sub Limits Property class allows the user to define the multiple shadow limits within the facility or utilisation limit by restricting or allocating the limit, based on the risk factors or criterions. At the time of creating the facility arrangement, the sub-limit(s) limit record will be created as per the definition in the sub-limits PC. The restrictions and allocations are regulated based on the risk elements, borrower, currency and product (Product, Product group, and Product line).

Exchange Rate property class is to define the Exchange Rate (FX), Rate Tolerance and Prior Days, Advance FX Fix Activity, and so on to support the Advance FX fixing requirement.