PRIV R107b Glossary

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Most mistakes in global political relations are caused by missing understanding or wrong translations. The same applies to the relationship between business and IT.

This glossary aims to do the translation between the differing terminology of 

• SLW
• Global Payment Platform (GPP)
• TIM and GSI
• Business Capabilities Model (BCM)
• Swift and financial channel terminology
• General Operations and Banking terms

(by Georg Morgen, End January 2016) 

References

• SLW Glossary as outcome of the Cognizant description of SLW
• GPP documentation
• TIM 2.1 20140923.doc 
• : OPS TIM, Books & Records November 2015, KGOR, Andre äppli
• BCM 

Glossary terms

{{{Abwicklungsreferenz}}}

Abwicklungsreferenz

(SLW)German word in SLW for [XXXX|fdg]

is a logical storage of  of the bank or of one of its clients. As opposed to , accounts are relevant for , it is a back-office term.
In every account the movements and the position – the sum of all movements – are visible.Accounts can be classified by the type of financial assets, e.g. cash accounts and security accounts.
In operations accounts can be classified in bank–owned trading accounts, client accounts, market-side accounts and wash accounts.

{Actual Booking}

Actual Booking

In actual booking model, transactions are only booked when the both the client-side transaction and the market-side implications are settled.

(GSI)after manual setup in the settlement obligation generator, a Standard Settlement Instruction (SSI) can be reloaded in the Settlement Engine.

Once to a fullfillment for the settlement obligation is received, then the expected booking is deciduous. 

Now the actual booking represents the reality which conforms with the one of the external world.
In case of shapings, the FF link to shapes, not the original SO. The booking systems will therefore need to perform some logic to trace back to the settlement obligation.

source TIM Books and Records

Operations provides finance and front-office with actual bookings. Technically spoken, actual booking provides a view on the booking process, an “actual booking view”.see also  –> Front Sourcing

Doing an actual booking provides a database view on the booking process, an “actual booking view” inside Market-Side Position Management Systems.

Advice

Advice

(or Processing Advice)

is an detailed information flow from [agent banks|#agent bank to the owners of market-side accounts about the ongoing processing of settlement.
For us as account owners, it contains detailed information is how our market-side accounts are moved and a status intimation. It typically follows an earlier instruction that specified which market-side accounts were to be used.

The typical SWIFT messages for advices are
MT548: Processing Advice (see also status initimation)
MT900: Confirmation of Debit
MT910:  Confirmation of CreditAdvices or notifications initiated by a central counterparty do not need an earlier instruction.See also –> unadviced     

Agent Bank

Agent Bank

(Synonym in SWIFT: account servicer)
An agent bank is the financial institution where one or more of our market-side accounts are contracted and booked. Typically an agent bank does settlement or corporate actions in foreign markets for us.
An agent bank may be also our representative on some exchanges, as CCP.

The wording “our custodian” is used as synonym for “our agent bank”. See –> Custodian

Asset Class

Asset Class

Typical asset classes on the securities side are equities, bonds and funds and – on the payment side, a cashflow/cash.SLW has specific treatment per asset class only at detailed level, like specific attributes. The differences in major flows are triggered by the input system to SLW.

Asset Servicing

Asset Servicing

are the business capabilities related to corporate actions.see BCM 7.5 Asset Servicing

Back Office

Back-Office

As opposed to Front-Office, the back-office is the part of the bank that is not directly related to clients or proprietary trading.
Operations belongs to back-office. Finance is sometimes considered to be part of back-office, for others it is a third part of the bank, separated from both front- and back-office.
In the legal entity (LECH) project, Credit Suisse is considering to create its an independent services company for back-office, IT and potentially even finance functions.

Beleg

Beleg

(SLW term)is the print-out of a confirmation in paper or electronic form. The confirmation can refer to a transaction or a SLW transaction.

Belegreferenz

Belegreferenz

(SLW term)is the primary identifier of a Beleg.

Blocked Account

Blocked Account

(synonym frozen accounts)contains positions on either client- or market-side that were filtered by sanction screening or money laundering.

Blocking

Blocking

(synonym reservation) is an operation on a position that makes it unavailable for trading. Blockings are created e.g. by securities lending, by the provision of collateral, or by corporate actions.

Examples from DBH:

 

 

 

 

 

 

 

 

 

Book

Book

is a logical grouping of proprietary  of the bank. Book is mostly used as a front-office term. Examples for the group is by trader, by financial asset type or by currency.
Hence the trader has his positions in “his book”. In finance, the term is often used as equivalent to a finance account.

Booking

Booking

is the process of updating account positions on client-side accounts, market-side accounts or finance accounts in the client-side position management, market-side position management and finance systems.
It is triggered by a booking request from the upstream systems. 

As opposed to transactions and settlement obligations, bookings are single-sided, they concern only one account.
Booking is done for client-side positions , for market-side positions and in finance for the accounts in the sub-ledgers and the general ledger. 

Booking causes movements on the accounts. It is triggered by a booking request. GSI: In the Global Cash and Stock Record, booking is based on expected (expected view) and fulfilled settlement obligations (actual view). SBIP/SLW: Booking for both Client-Side accounts and Market-Side accounts are done in the Swiss cash record and the stock record DBS.
SLW triggers the creation of transactions in the order managers for Market-Side Accounts based on SLW transactions.

Booking Request

Booking Request

is a message of an upstream system (like SLW or GPP or SOH) to a client-side or market-side position management to do a booking with the data in the booking request.

Broker

Broker

When executing trade orders on behalf of a customer, the institution is said to be acting as a broker.

Broker-Dealer

Broker-Dealer

is a natural person, a company or other organization that engages in the business of trading securities for its own account or on behalf of its customers.
Broker-dealers are at the heart of the securities and derivatives trading process. Although many broker-dealers are “independent” firms solely involved in broker-dealer services, many others are business units or subsidiaries of commercial banks, investment banks or investment companies. source: Books and Records TIM

Broker-Dealer Model

Broker-Dealer Model

is a booking model used by many [broker-dealers|#broker-dealer. Client-side positions, in particular the trading positions, are booked in the actual view, namely, when the market-side positions have been settled.
In short, booking happens after settlement. The opposite model is Contractual Booking

For brokers and dealers the (executed) trade and the subsequent settlement is in the primary focusThe position of a broker is therefore existing (mainly) between trade date and settlement date only; the dealer has a slightly longer term of view – but his position is also created in order to be closed rather soon again.Having the Nostro accounts under tight management is key for the broker-dealer to always serve due settlements / obligations.Only when having own books, the broker-dealer has a position over a longer time period (still short term if compared to PB).
source: Books and Records TIM

Bulk Order

Bulk Order

is the combination of multiple client orders into one order.

Bulk Settlement

Bulk Settlement

is the settlement of multiple trades with one settlement obligation and/or one instruction
see also –> shaping 

Business Unit

Business Unit (BU)

TIM: A Business Unit (BU) is a separate part of the bank, that is a specific business area (e.g. CS Private Banking Switzerland) within a legal entity or is itself a legal entity (LE, e.g. Neue Aargauer Bank, NAB

Cancellation

Cancellation from Market

In the settlement area, a cancellation from market is a deletion of an instruction or an advice by a participant in our market network.

Cash and Liquidity

Cash and Liquidity Management

BCM 7.6.1. The process to actively monitor and intervene in the settlement workflow (i.e. on Market-Side Accounts) to ensure that it executes within the liquidity and inventory limits as set for the entity.

There are four outcomes of this process each of which leverages other BCM functions:
1) Automatically sweep monies between accounts to cover a shortfall (7.4.1)
2) Trigger the re-netting of settlement obligations to make better use of existing liquidity (7.4.2)
3) Monitor and propose the rescheduling of outgoing settlement instructions (ie prevent the release of payments that will cause CS to be overdrawn) (7.4.4)
4) Recognize when there are insufficient funds to meet the settlement obligations and escalate to the front office to decide an appropriate action (ie choose the appropriate strategy for obtaining additional funds or inventory) (2.3.1)

(synonym: Market-Side Position Management)

Cashflow

Cashflow

Cashflows are the consequence of the excutions of certain types of financial transactions.Some examples of these transactions are:

• Payments
• OTC contracts
• The cash side for purchases of securities
• Corporate actions like interest payments or cash dividends.

Cash Feeder

Cash Feeder

The Cash Feeder is the system or part of a system that is responsible for cash flows.
GPP Client Side has cash feeder functionalities. A Cash Feeder is the system that sends cashflows to back-office and finance.

Cash Leg

Cash Leg

see leg.

Cash Record

Cash Record  

TIM: This is the posting engine for single customer accounts, internal accounts and Nostro accounts.

see also –> Global Stock and Cash Record

CCM

CCM (Continuous Cash Management)

is a Credit Suisse project that aims to improve intra-day liquidity on market-side accounts.
see –> Cash and Liquidity Management

CCP

Central Counter Party (CCP)

Is a market maker and central depositary at the same time.

TIM: is an entity that interposes itself between counterparties to contracts traded in one or more financial markets, becoming the buyer to every seller and the seller to every buyer.
Exchanges and clearing houses have a CCP.

We allow that the CCP initiates the settlement process with an instruction to us or our agent banks. This leads to a locked-in trade.

Central Depository

Central Depository

is the financial venue where market-side accounts are located and booked.
As opposed to an agent bank, it has a central storage (a depositary) for these positions.

CID

CID (client identifying data)

is data that is able to identify clients, examples are: Client name, Address, Phone number, email address, Date of birth, CIF or account number, payments or details of payment instructions
Regulation like banking secrecy laws (e. g. Switzerland, Luxembourg Singapore) stipulate that CID cannot leave the country.  In the shared components of GSI no CID is used, but only non-identifying references on CID or encrypted data.
In the data delivery layer located in the relevant country, the non-identifying references are resolved and mapped to CID.

Clearing

Clearing

is often used as synonym of settlement. Its major use is the settlement in the party chain that is closer to clearing houses.

Clearing House

Clearing House

is a type of central depositary. The term is  often used for a central depositary that deal with cashflows and payments.

Agent Bank

Client-Side

Client-side stands for the accounts kept at our bank and the transactions and movements on them.

Agent Bank

Client-Side Accounts 

stand for the accounts of our clients and of the bank (German Eigenbestand) itself.

Agent Bank

Client-Side position management

is the business capability, situated in Operations that aims to keep the client-side accounts up to date.
(BCM 7.10. Cash and Stock Position Management)  Key differences to Market-Side position management:

1. Client-side position management in the custody and private banking area use contractual booking, while the market-side uses the broker dealer model.
2. As opposed to market-side position management, positions on the client-side require far more data. Typical example for these additional attributes are valuations and different types of reservations.

Agent Bank

Compression

is the settlement of many settlement obligations inside one single movement on the market-side accounts.
It is a special kind of shaping.See also –> netting.  BCM: Trade Compression

BCM 7.1.10: The enrichment of trade records to enable effective and efficient downstream processing.
Trade enrichment includes the calculation (figuration) of  cash values, selection of custodian details, determination of transaction reporting method, etc.
Enrichment may need to form part of the trade lifecycle management capabilities that are performed after the creation or designation of specific versions of trade records, and that must be carried out independently of trade execution/recording capabilities.

Agent Bank

Confirmation 

is a type of financial messages that approve the validity and the fulfillment of

1. OTC contracts
2. transactions and cash flows
3. settlement obligations and instructions

between us/our clients and our agent banks and counter parties.
Typically for each of the categories 1, 2 and 3 different systems are used, e.g.

1. Contract confirmation systems (in Credit Suisse Fenics)
2. Order Management Systems
3. A Validate Settlement System

The confirmations may be in paper form (e.g. signed OTC contracts) or electronic form (e.g. SWIFT messages).

see  –> settlement confirmation

Agent Bank

Contractual Booking

(also custody booking model)Is the booking of client-side account transactions into the client-side position management system at the time that a client order got executed.
Already the arising transaction represents a contract for the bank. Typically the client-side booking happens before settlement.

Agent Bank

Counter

see vault
Counter Partyrepresent either

• contract partner on the other side of a transaction or
• (in operations) the bank thats the account of the other side. Our side is either a book of the bank or the client.

Agent Bank

Corporate Action

todo later…

Agent Bank

Creditor

is one side of a cashflow or a transaction. The quantity of the concerned position augments with a credit.

Agent Bank

CSD (Central Securities Depository)

a name for the central depositary for securities.

Agent Bank

CUBE

(SBIP) is an order manager for transfers.

Agent Bank

Custodian (or custodian bank)

is a specialized financial institution responsible for safeguarding a firm’s or individual’s financial assets and is (normally) not engaged in retail or investment banking.The role of a custodian in such a case would be to hold domestic and foreign assets/securities, arrange settlement, perform corporate actions (incl. handling of tax / tax reclaims), provide information on the securities regarding annual general meeting, etc.

Custodian Service requires sophisticated securities Position Keeping services with long term focus, including the knowledge of where the securities are held (deposited),
and whether the stock is borrowed or lent or is used as collateral (i.e. capabilities to model reservations, blockings and restrictions).Not the single trade but rather many trades with same custodian (depository) / FI form the position.

source Books and Records TIM

We use custodian banks as our agent banks for settlement.

Agent Bank

Data delivery layer

(GSI)is the service in the different locations, that maps non-client identifying references to CID, so that users can see the relevant client data.

Agent Bank

Dealer

When executing trades for its own account, the institution is said to be acting as a dealer.

see also Broker-Dealer

Agent Bank

Debtor

is one side of a cashflow or a transaction. The quantity of the concerned position diminishes with a debit.

Agent Bank

Deliver against payment (DvP)

Swift: MT543SLW: GA582

Agent Bank

Deliver Free of Payment 

Swift: MT542SLW: GA581

Agent Bank

Delivery Area

(SLW)
Example: SIS

Agent Bank

Depositary

is a naming for the physical storage of market-side accounts. Depositaries may exist at agent banks or at a central depositary (see CSD).

Agent Bank

DFP (deliver free of payment)

(SLW) GA 581

 

Agent Bank

DTA File

GPP sends and receives interchanges (fulfillments) in a so-called DTA file. The following graph gives an overview of these files and its structure.

Agent Bank

Eigenbestand

(SBIP, German)
a proprietary position of a bank, at book or account level.

Agent Bank

Enrichment

is the process of completing transaction data for client-side orders and settlement obligations so that settlement data are clear. This includes:

• In trade support (front-office): Specification of stock exchange for securities orders and clearing methods for cash flowsIn operations: 
• Definition of standard settlement instructions (SSIs) based on asset class, exchange and clearing method, and other data
• Application of SSIs to settlement obligations to obtain enriched settlement obligations

Agent Bank

Exchange

is a financial market where buyers and sellers meet to match their orders.
As opposed to a CSD, an exchange does not necessarily have a depositary.

Agent Bank

Execution

see trade.

Agent Bank

Expected Booking

Expected booking is the booking that is generated in Market-Side Position Management as soon as a new settlement obligation has been received and enriched with SSIs.

By reception of a SO of type delivery, expected booking is performed. The SO was (in delegated model) or will be (by SE) instructed to the market. The expectation is that ultimatly a fulfilment will match with the obligation.
But at the time of the reception of the SO, the advise has not arrived yet.source TIM Books and Records

Agent Bank

Expected view

Doing an expected booking provides a database view on the booking process, an “expected booking view” inside Market-Side Position Management Systems.

Agent Bank

Fails determination and notation

The business capability performed by the reproblem agent component (RA).

 BCM 7.4.6: The recognition of the state, and subsequent notation thereof, when an SO fails to settle (either fully or partially) by the appropriate designated time on the expected settlement date.
This will vary by market. This notation is used by downstream capabilities to determine fails compensation amounts and direction (debit or credit).

Agent Bank

Finance

is the part of the bank that reformulates and synthethises account movements and account positions for reporting, regulatory, tax and bank capital management purposes.
This includes:

• Profit and Loss (P&L) statements on different granularities (e.g. from a product over legal entities to the whole bank)
• Balance sheet statements on these different granularities for these positions.

(BCM 9.1. –  9.16.)

Agent Bank

Finance account

Finance uses the term “account” for various groupings of their profit & loss and balance sheet statements in the [subledgers|subledger] and the general ledger.

Agent Bank

Financial messages

are messages among financial institutions that are typically different electronic financial channels like SWIFT, SIC or SEPA.Financial messages follow different common like ISO 20022.

Agent Bank

Financial Messages Platform (FMP)

Is a Credit Suisse application for sending and receiving financial messages.
GPP MarketSide connects to FMP.

Agent Bank

FIX

Is a protocol used in the post-trade area, e.g. for order allocations and partial executions.
It also settlement functionality but this one is not often used.

Agent Bank

Fulfillments

(GSI) represent a matched advice or confirmation received from the market that reflects the actual sitation.
Fulfillments partially or fully close – they “fulfill” – settlement obligations.

Agent Bank

Front-Office

are the functions in a bank directly related to books and clients.

Agent Bank

Front Sourcing

According to Front-Sourcing guidelines, P&L flows and balance sheet should flow directly from Front-Office to Finance and should be decoupled from OPS flows.
Front-Sourcing delivers expected booking requests. Executed orders lead to information flows inside the bank:

• a finance flow from the order managers to finance (into the balance sheet items)
• a finance flow from the order managers to finance (into the Profit &Loss items)
• a settlement obligation flow, from the order managers to Operations, that aims to settle the cash flow
• and finally a booking into the client-side position management and market-side position management system(s)

Agent Bank

General Ledger

A storage of finance accounts and their valuation at a less granular level. It’s mainly used to do financial reporting.

Agent Bank

Global Cash and Stock Record

(GSI)is a future Credit Suisse system in Global Operations that is supposed to do both client-side position management and market-side position management.The Global Cash and Stock Record is a Market-Side Position Management system, but not a full-fleshed Client-Position Management system.
It uses the broker-dealer model for booking client-side positions.

The following slide from the OPS TIM Books and Records show some of the missing functionality.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agent Bank

GPP MarketSide

 is the part of GPP that is connected to the market via financial messaging.
The principal accounts are

• the different  market-side account for Credit Suisse, i.e. a Credit Suisse SEPA Nostro Market Account, a Euro-SIC Nostro Market Account.
• a suspense account for repairing problems in messages
• a blocked account for messages that have been raised by sensitive countries and money laundering rules

GPP MarketSide provides a GUI for dealing with the market and for solving problems associated with the above accounts.

Agent Bank

GPP ClientSide

is the part of GPP that receives payment orders from client-facing and Front-Office applications.
Therefore it represents an order management system, more specifically a cash-feeder.
GPP ClientSide has a front-end, called BPO (Browser Payment Order) a browser to view payment orders and their status. Once payment orders are executed (become cashflows), GPP sends booking requests to the Swiss finance and position management systems (NBS and ).
It also reflect the movements on different wash accounts.

Agent Bank

Instruction

is the financial message that tells an agent bank or a counter party how to settle a (shaped) settlement obligation.
It typically tells the participants which market-side accounts, e.g. accounts at the agent bank, CCP, etc. shall be used for settlement.
As opposed to an advice, an instruction is a message from the owner of a market-side account to the account servicer.
BCM 7.4.4. Asset Movement Instruction

The process by which assets are caused to enter, leave or move between, Credit Suisse’s accounts.  A view over all incoming receipts (cash and securities) will assist with determining the timing of any release of payments/deliveries, subject to commitments to CCPs, CLS, etc

Tpyical Instructions in SWIFT (securities):MT540: Receive Free of Payment
MT541: Receive Against Payment
MT542: Deliver Free of Payment 
MT543: Deliver against payment

In GPP one instruction can refer to multiple payment orders (in GPP also called transaction). In GPP, the term settlement obligation is not used.Instead the instruction is directly linked to one or more payment orders. 

Agent Bank

Instruction Reference

(SLW)the primary identifier of an instruction transaction.

Agent Bank

Instruction transaction

(SLW) 

is one type of SLW transactions that is 

Agent Bank

Interchange

GPP terminology for a transmission of instructions. For each interchange one or more instructions can be found.

Agent Bank

Intercompany Netting

is the netting of multiple (shaped) settlement obligations between two financial institutions.

Agent Bank

Internal booking

An internal booking does not require any activities with the market. It is a booking done for a given legal entity and “simply” require a transfer within the booking system.
The SOs of type booking and subtype blank are typical internal booking.

Source TIM Books and Records

Agent Bank

Kompensation

(SLW) for compensation. The SLW term for netting of two SLW transactions.

Agent Bank

Legal Entity

Is a subsidary of our bank, that establishes its own financial reporting.
As opposed to a business unit, each legal entity often a different network of agent banks. Legs(GSI) A settlement obligation can have different legs based on asset type. In order to settlement to whole obligation all legs must be settled.

• Cash Payment Settlement Obligation – have a single Cash Leg specifying the currency and the cash amount to be paid.
• Foreign Exchange Settlement Obligation – have two Cash Legs, one specifying the currency and the cash amount of the base currency and the other specifying the currency and cash amount of the quote currency.
• Delivery versus Payment Settlement Obligation – this would have a Cash Leg specifying the currency and cash amount of the consideration, and a Stock Leg specifying the equity and number of shares being bought.
• Rights Issue Take Up Settlement Obligation – this would have 3 legs:
  1) a Cash Leg specifying the currency and cash amount reflecting the rights issue price;
  2) a Stock Leg specifying the quantity of the nil-paid rights issue stock being traded in; and,
  3) a Stock Leg specifying the quantity of stock due under the rights issue.source Books and Record TIM

Agent Bank

Lifecycle of a settlement obligation

Settlement obligations following a lifecycle according to states, indicated on the arrows.

Agent Bank

Liquidity management

TIM: Intraday Liquidity
Manage rules for smoothing of outgoing instructions to optimize liquidity availability based on inflows and market liquidity rules and incentives.

see also market-side position management.

Agent Bank

Locked-in trade

(SLW)A locked-in trade is a trade assigned to our books or for one of our clients, where the settlement process has been initiated by a CCP.
For this locked-in trade we obtained a notification.

Agent Bank

Loro account 

(from Latin “their”)
In the communication between us and our agent bank, used for the data of the counter party of our trade.

Agent Bank

Market

The term “Execution in the market” means finding a counter party of a trade.
Market (in settlement terms) stands for our network of counter parties and agent banks.

Agent Bank

Market Claim

(SLW)MT548/MT544-7 tags:  :20C::CORP// & :22F::SETR//CLAIMT566 tags:  :20C::CORP// & :22F::ADDB//CLAI

Agent Bank

Market-side

Stands for our network of agent bank  and (central) counter parties.

Agent Bank

Market-side account

Market-side accounts is either an account that

1. that are owned by our bank, but contracted and located at our agent banks and (central) depositaries
   –> Nostro account, in SLW: Custodian Account
2. that is owned by the counter party during the settlement of transactions with it
   –>  Vostro or Loro

In GSI: Market-side accounts also refer to the copy of these external accounts kept in the Global Cash and Stock record.

Agent Bank

Market-side position management

is an alternative naming of Liquidity Management, for Market-side accounts.see also –> client-side position management.

Agent Bank

Matching

In GSI, matching compares fulfillments to settlement obligations and marks them as matched, see –> Validate SettlementIn SLW, confirmations (e.g. MT544-547) are matched against SLW transactions 

Agent Bank

Matching Rules

(GSI vs. SLW)see 

Agent Bank

Movement

is a change in the quantity of financial assets at a position level, for example in the client-side position management or market-side position management.
The process of booking causes movements.

Agent Bank

Netting

allows to combineIn pre-trade:

• many orders into one single order (bulk order)

In post-trade (see also PTSOG)

• many trades into one single trade
• many cashflows as one single cashflow 

In the settlement cycle: the combination of

• (GSI) many (shaped) settlement obligations in one (shaped) settlement obligations.

Netting explicitly allows to combine debtor and creditor sides.(in SLW) Kompensation

Agent Bank

Nostro account

(from Latin “Our”)
Communication between financial institutions use the word Nostro for our market-side account contracted at an agent bank or a central depository.In GPP: They are typically grouped by financial message channel like “SEPA market account” or “SIC market account”.
Market-side accounts also includes for exception handling like suspense accounts and blocked accounts.

Agent Bank

Notification

(GSI)is the GSI term for an advice obtained from a CCP about the start of the settlement, that is submitted to the Settlement Generator.
It leads to a settlement obligation of subtype notification.
If the settlement process is stared with a notification, then there is no need for an instruction.

Agent Bank

Omnibus account

see Nostro

Agent Bank

Operations

is the part of back-office that concentrates on

• settlement
• position management and liquidity management
• transaction management (all types of transactions excluding trades)

Agent Bank

Order

is the confirmed intent of a client or of the bank itself to do a transaction.  Analogously to transactions there are different types of orders, like trade orders or payment orders (relevant for GPP Client Side)
Some type of orders, in particular trade orders (e.g. buy or sell orders), are often not executed. They need a counter party, that takes the other side of the trade for the specified price.
Other transactions, like payment or transfer orders, will be nearly always be executed. They are not executed only in rare circumstances, e.g. when they got detected by sanctions screening or money laundering.–> see P90 Order

Agent Bank

Order Cycle

see party chain

Agent Bank

Order Management System

(synonym: Order Manager, Trade Management System)is the application that obtains orders from clients or from other front-office applications. Its main objective are:

1. execute the orders in the market. The result are trades or executions of one order.
2. inform front-office systems about executions and settlements
3. send expected bookings to finance and position management systems
4. forward the trades as “generated” “settlement obligations” to a settlement obligation handler

Many order management systems also integrate VnE (Validation of the orders and enrichment with market data).
In the Credit Suisse IB architecture function 4 is assumed by a Post Trade Settlement Obligation Generator (PTSOG).

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OTC (Over the Counter) Contracts

Most transactions follow a base contractual agreement between the bank and the client that formulises how to enter trade or payment orders.
They are based on standardized financial assets usually traded directly between the two parties.

OTC contracts, however are agreements between two counter parties, based on a new contractual agreement. OTC contracts lead to a series of transactions or cashflows.
The task of operations is to obtain confirmations for the contract and and cashflows.

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P90 Order

(SLW/WS-Infra) P90 is the database in the SBIP host for orders.
In WS-Infra and other order managers like CUBE, orders are created for both client-side accounts and market-side accounts.
Orders for client-side accounts come from the front-office systems. The ones for market-side accounts are iniatiated in SLW.

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Pair-off

see netting

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Payments Market-Side (PayMS)

Payment related SOs of type Delivery are sent to Payments Market-Side (PayMS); PayMS is a special combination of SF and SE.
Hence

1. it enriches an SO with cash flow related SSI and sends this enriched SO back to the SOH (SF functionality).
2. it creates the Settlement Instruction (SI) and sends it to the marke (SE functionality).
3. it handles status advices and allegements from the market (SE functionality)

 

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Partial Settlement

happens when all other matching rules are fulfilled but the quantity in one or both legs (cash and securities) do not match.

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Party Chain and Settlement Cycle

is a path from our accounts or clients accounts over our market-side accounts at agent banks to central depositories that permits to uniquely identify the owners of the accounts.
Settlement obligations may be settled over such party chains.

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Payment

is a type of financial transaction based on a client payment order that results in a cash flow, an executed payment.

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Payment Order

Is a type of order for a single cashflow. In GPP, it is also called transaction.
The transaction ID references the payment order from the front-office systems, while the transaction reference is the internal GPP for the payment order.

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Position

represents the holdings of a financial asset. Books and accounts are containers that hold several positions.

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Position Keeping

is either client-side position management or market-side position management.Based on the type of financial institution different requirements arise:

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Post Trade Settlement Obligation Generator (PTSOG)

see SO Generator.

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Pre-matching

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Pre-Client Order

(SLW) is a SLW Transaction based on an incoming SWIFT e.g. for transfers. SLW sends this SLW transaction as “pre-client order” to CUBE so that CUBE creates a client order.

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Product

the term “product” can be used in various meanings, like asset classes, or for types of settlement channels (e.g. SEPA, SIC, SWIFT).

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Receive Against Payment (RVP)

Swift: MT541SLW: GA512

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Receive Free of Payment (RFP)

a transfer to be received in our bank. Swift:  MT540SLW: GA511

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Reservations

see –> blockings

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Reproblem Agent (RA)

Is a component of the GSI architecture, closely attached to the Validate Settlement component. It implements the BCM function Fails determination and notation.

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Rubrik

(SLW) (German) number of a market-side account.

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Sanction Screening

based on checklists of sanction countries and sanctioned persons, the sanction screening leads to the identification of subsceptible transactions.
Similar to money laundering, susceptible transactions are booked on blocked accounts. While money laundering screening is done on client transactions, both client-side and market-side accounts are examined for sanction screening.

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SBH (Sachbuchhaltung)

(SLW) is the table in SLW that contains information about our market-side accounts and their movements.

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Settlement

Settlement in the strict sense is the process of correct and cost-effective movements on the bank’s market-side accounts so that all settlement obligations are fufilled.
(BCM 7.4. Clearing, Settlement & Custody)

Settlement in the larger sense is the combination of

• settlement in the strict sense
• booking of movements into client-side and market-side position management systems.

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Settlement Allegement

(MT578)
is a message from an agent bank, that it cannot match the instructions of the owner of the market-side accounts to the instructions of the counter party.
In SLW, an allegement is sent to business for reproblem. In GSI, it should be resolved by the Reproblem Agent component.

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SettlementChain

(SLW) for party chain

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Settlement Confirmation

is the financial message that confirms a previous instruction or advice.
Typical examples in Swift:
MT544: Confirmation of Receive Free of Payment
MT545: Confirmation of Receive Against Payment
MT546: Confirmation of Deliver Free of Payment
MT547: Confirmation of Deliver Against Payment

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Settlement Date

Can be the

• expected date when a transaction or cashflow should be settled or
• the actual date when a transaction or cashflow was settled

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Settlement Engine (SE)

(GSI) The Settlement Engine (SE) has three subsequent tasks.

1. The SE performs shaping of SOs to improve settlement efficiency and risk mitigation.
2. SE then creates the Settlement Instruction (SI) and sends it to the market.
3. In both the pre-settlement matching mode and the final settlement cycle, SE handles status advices and allegements from the market. SE also handles shaping requests post settlement for efficient VS matching.Source TIM Books and Records 

GPP Market Side contains the functionalities of a settlement engine.

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Settlement Feeder

(GSI)
The settlement feeder enriches SOs of subtype instruction by Standard Settlement Instructions (SSI) obtained by a reference data system for SSIs.

TIM: The Settlement Feeder is responsible for applying SSI’s to the Settlement Obligation in an STP processing scenario as well as routing the settling Settlement Obligations (delivery obligations) to the appropriate Settlement Engine.

TIM Books and Records:

1. SOs of type Delivery are sent to Settlement Feeder (SF) where SSIs are added.
2. Enriched SOs of subtype Instruction are also routed to the appropriate Settlement Engine (SE) for instruction in the market.
3. SO of subtype Notification are ready for matching and are sent to Validate Settlement (VS).

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Settlement Instruction (SI)

see instruction

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Settlement Obligation (SO)

(GSI)is one obligation to settle one or more transactions in the market so that the contractual obligations are fulfilled.
Without a post trade optimisation there is a 1:1 relationship between transaction and SO (and SOID), the post trade may change this to many transactions to one SO.Shaped SO are also Settlement Obligations, after they have been shaped.
In GPP, a settlement obligation is generated for each payment order. In GPP, users create n instructions for m payment orders. This n:m relationship corresponds to a “shaped” settlement obligation.

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Settlement Obligation Store (SOS)

is the component of the GSI architecture that stores the history of (shaped) SOs and SO versions.

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Settlement Transaction 

(SLW)
See  –> SLW transaction

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Shared Components

are the components of the GSI architecture that are not location-specific. They can be deployed in any location.The settlement engine is one of the few components that are location-specific. Others like SOH, SOS, GSR/GCR, SF and the GUI are shared components.

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SLW Transaction

a movement of market-side accounts. It is stored in the SBH database of SLW.

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SO of type Booking

if the accounts involved are internal to our bank, then the SO is a SO of type booking.
SOs of type Booking do not involve external settlement, so are immediately actioned on the expected settlement date.

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SO of type Delivery 

if at least one of the accounts involved is serviced externally or the accounts belong to different legal entities, it is deemed an settlement of type Delivery.

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SO of subtype instruction

is the GSI terminology for a settlement obligation that requires an instruction to the market.

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SO of subtype Notification

is the GSI term for a settlement obligation that is obtained from the market, e.g. from a CCP.
It is usually already fully dressed – as opposed to SOs of subtype instruction, hence it does not require SSIs.

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Securities account

an account that only contains positions of asset type securities.(SBIP, German) Depot

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Settleable Transaction Identification

BCM 7.4.1. The identification and designation of Settlement Obligations (SOs) that require an external movement over a nostro or depot. These SOs could
– Originate from internal Credit Suisse systems or from external service providers
– Be generated from gross or net transactions, including those that are
– Inter-company
– Bilaterally settleable
– Delegated netting (POA)
– Delegated settlement (POA)
– Delegated margin (POA)

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Shaped settlement obligation (Shaped SO)

after shaping several settlement obligations become shaped settlement obligation.

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Shaping

is typically the process of creating a more “complex” settlement obligation out of several single SOs that we originally generated by several transactions.
From the client-side view, the settlement obligation gets more “complex” because it now settles many transactions in the market.
From the market-side view, it becomes more simple and cost-efficient, because one market-side movement can settle many client transactions.

BCM 7.4.2. The process whereby a series of settlement obligations are brought together (bulk and/or net), or split apart, into settlement shapes to increase efficiency, reduce cost, improve control and mitigate risk (settlement, credit, counterparty, etc).

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SLW Reference

todo

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SLW Status

is a shortcode for a function of SLW. Many status leads to a delivery of information to a consumer system. The delivery of the information leads to an event in the interaction.

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SLW Transaction

is movement on a market-side account, resulting a movement in the SLW database SBH (P27).

SLW sources SLW Transaction to order managers (like CUBE, DEGA, TU, etc.) to use the data stored in SLW Transaction (P27) database to be used for enrichment of the order being created in Order manager.
SLW acts as first source of data capture, parses incoming messages and stores the data in its database. Other order managers do not directly use the incoming SWIFT, rather depend on SLW to get already parsed data and use in their respective processing

Source SLW Functional Decomposition

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SLW Transaction Type
todo

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SO Generator 

(GSI) 
is a component, situated in trade management (more specially in the post trade area),Settlement Obligations have three sources.

1. Trade Management sends a transaction or cashflow that needs to be settled.
2. A CCP sends an advice (in GSI “notification“) that require settlement.
3. Manual assignment of SOs to transactions or notification in the SO Generator GUI.

see also –> settleable transaction identification

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SOH Processor 

see SOH

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SOH (Settlement Obligation Handler)

is the central GSI component that routes settlement obligation to the different functions like settlement or booking.
Based on the interactions with the other components, it also modifies the status of the SOs, the lifecycle. Its major tasks are: 

1. It accepts or rejects submitted SOs following validation. It stores valid SOs in the SOS, provides unique SOID and starts lifecycle mgmt.
2. SOs of type Delivery are sent to SF. SOs of type Booking SO(B) are sent to Cash Record and Stock Record for booking. SOH guarantees consistency between cash & stock record bookings.Source: TIM Books and Records

 

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Standard Settlement Instructions (SSI)

are enrichments of settlement obligations with information how to settle them for different products, markets, currencies and trading places.

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Status intimation

In SLW and SWIFT, the matching  to a transaction, is also called the identification of a status intimation.
In GSI terms, it corresponds a fulfillment, the status update of a settlement obligation via SWIFT – usually transmitted in an advice.

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Stock Leg

(GSI)see leg.

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Stock Record

TIM: This is the posting engine for client, firm and mirror (Nostro) safekeeping accounts (depot).

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Street-Side

is often used as equivalent to market-side.
while market-side rather stands  for the network of our market-side accounts at agent bank or at exchanges, the street-side is often used to designate counter parties in the market.

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Subledger

A storage of finance accounts, their valuation and profit and loss at a granular level. For different types of financial assets there are often different subledgers (this is not nessarily like that).
Examples in Credit Suisse: Savas for securities, XBS for Cash and  Murex for OTC.
see also General Ledger.

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Suspense accounts

are special types of market-side or client-side accounts that are used to repair wrong or incomplete financial messages.

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Trades

are orders that have found a counter party that is ready to assume the other part of the arising contractual obligation.
When an order is only partially executed, we speak of partial executions. Trades are a special type of transactions.

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Trade Confirmation

see also –> confirmation as general term

BCM 7.2.1. The agreement of trade details with the counterparty or appropriate CCP. Trade confirmation can follow different methods, including trade confirmation matching, and trade confirmation affirmation.
Segregation of duties is required such that this capability is exercised independently of trade execution/recording capabilities. Trade confirmation can include the generation and issuance of trade confirmations to the counterparty,
the receipt of incoming trade confirmations from the counterparty, incoming allegements from a CCP, trade matching, and trade affirmation. As well as being applied to individual trades, trade confirmation may also be applied periodically to portfolios of open trades.
This includes bilateral reconciliations, and reconciliations with trade repositories such as CCPs and exchanges.

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Trade Date

is the date when a client or a trader started the contractual obligations of a transaction.
Two examples:

• the date when a trade was entered in a trading system
• (use in broader sense) the date when a client gave a payment order.

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Trade Enrichment

BCM 7.1.5: The enrichment of trade records to enable effective and efficient downstream processing. Trade enrichment includes the calculation (figuration) of  cash values, selection of custodian details, determination of transaction reporting method, etc.
Enrichment may need to form part of the trade lifecycle management capabilities that are performed after the creation or designation of specific versions of trade records, and that must be carried out independently of trade execution/recording capabilities.

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Trade Validation

BCM: 7.1.4 The validation of data within an enriched trade to ensure effective and efficient downstream processing. This validation may form part of the trade lifecycle management capabilities that are performed after the creation or designation of specific versions of trade records,
and that must be carried out independently of trade execution/recording capabilities.

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Transfer

(as transaction or transfer order)  a delivery or receipt of securities on a securities account.(in settlement) a movement of securities from one securities account to another – at the same bank or between banks.(as payment) a cash flow or a transfer between market-side accounts.

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Transformation

(SLW)MT548/MT544-7 tags: :22F::STCO//TRAN

more to write

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Transition Account

(SLW) German: Abwicklungskontois the SLW name for a wash account.

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Transaction

is an executed order that require settlement. After booking, they are visible as movements on accounts.We know the following types of transactions:

• Trades after orders for securities
• Transfers 
• corporate actions
• Payments in the area of payments and OTC
• Fee transactions
• Borrowing and Loans transaction
• Tax transactions

Similar as settlement obligations, transactions are double-sided with a debtor and creditor part, while bookings are single-sided.
In the new GPP BPO the term transaction (transaction ID, transaction reference) is used as equivalent of payment order.

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Transaction Control

BCM 7.1.13: Is dedicated support to a niche business flow and acts as coordinator for all Operationally aligned functions. Client static data, confirmations, instructions, pre-matching and fails management.
Completion of control functions & reporting. Intercompany & interbook reconciliation, FOBO recs, Structured Trade Reviews and Trade Booking Reviews for exotic trades where external validation may not be timely.
Also includes checks on the completeness of the trade population.

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Unadviced

Is a cash flow on market-side accounts that is received without a corresponding settlement obligation and instructions from a counter party or our agent banks.

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Validate Settlement (VS)

is the component that “validates settlements”. Its main function is to match settlement obligations against external settlement events (i.e. advices and confirmations)
It creates fulfillments for matched settlement obligations.

TIM Definition: The Validate Settlement process is a framework designed to capture and record all available internal and external events to ensure the completeness
and accuracy of our books and records as well as to significantly reduce the quantity of discrepancies between internal and external events via the reconciliation process.
BCM 7.4.5. A control over the receipt and management of real-time advices and status messages confirming an asset’s settlement state. The control will be performed by matching known internal business events with external settlement statuses on an intraday basis.

Detailed Definition:

1. Validate Settlement (VS) matches external settlement events  with SOs in the SOS representing CS internal expected view.
2. Where a match occurs, VS links the FF to the matching SO or group of SOs. The FF represents the settled part of a SO (actual view). There can be 0 to several FFs to one SO (reflecting possible fails and partial settlements). VS sends the FFs to SOH for ‘actual’ booking in CR/SR.
3. External events without a matching SO (‘unadvised’) are known as unrecognised FFs trigger a call to the Reproblem Agent (RA) .

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Valuation

is the assignment of prices to positions. Valuation is needed in finance and in front-office, but not in operations.
Some back-office functions outside of operations, e.g. client tax reporting also need valuations

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Value Date

is the date that is used for interest calculation, typically for cash accounts.

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Vault

is a physical storage of assets, as opposed to the logical storages, called account or depositary.
VnEVnE stands for Validation and Enrichment. Its tasks are three-fold:

1. Validation of orders and trades –> Order Validation, BCM 7.1.4.
2. Enrichment of orders with counter party data or where to settle a trade exactly –> Trade Enrichment, BCM 7.1.5
3. Exception handling of uncomplete orders or trades.

VnE are often integrated in the Order Mangement System.

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Vostro account

(from latin “your”)designates the account of the partner in the communication between financial institutions, for example in the communication between a banks and a counterparty.

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Wash account

is an intermediary account for settlement purposes. During the settlement process, they are used to transfer financial assets from client-side accounts to market-side accounts and vice versa.
After successful settlements, wash accounts have always a zero balance. In Credit Suisse, wash accounts exist at business unit level and product level.

XBSXBS

(SBIP) is the Swiss position management system for cash.
It contains all 3 types of positions: Client-Side accounts, Market-Side accounts and wash accounts.
Booking requests for XBS are generated when transactions are created (–> contractual booking) and not when when settlement obligations are fulfilled (–> actual booking in GSI) .
XBS is a Client-Side Position Management system, in the sense that it contains all the relevant attributes like reservations and valuations.