SECURITIES

Securities are of two types

 Bonds
o Treasury Bills (Just a common paper)
o Commercial Papers (CP)
o Bills & Other discounted Products
o Euro Commercial Paper
o Fixed and Floating Rate Certificates of Deposits (CD & FRCD)
o US Treasury Notes and Bonds
o Foreign Bonds (Yankee, Samurai, Bulldogs etc)
o Zero Coupon Instruments (Coupon means frequency of interest payment
before maturity e.g. 2 Coupon means 2 interest repayment b4 maturities,
zero coupon means no interest but they are issued at a discount). However
some bonds do not have maturity too but Interest Rate
o EuroNotes (this is any instrument not denominated in the currency of the
issuer of the bill or the country where it is issued)
o Gilt (Government of UK bond instrument)
o Equities
o Options
o Interest / Discount is paid
o Mature on maturity date
o Distinguishing factors are:
 Currency
 Maturity date
 Rate
 Country of Issue
 Size of the company involved e.g. CP is for small companies
o The word “Euro” (in EuroNotes, Euro Commercial Paper) means an
instrument not denominated in the currency of the issuer of the bill or the
country where it is issued
 The differences between a Bond & Bill are:
o Bond can be bought or issued at a Discount or Premium. If bought at
discount, the interest element is amortized over the life of the Bond. If at
premium, then it means interest is loaded and paid at maturity.
o
o
o
o
 Shares
o Ordinary Share
o Preferential Share
 o Dividend is paid on Shares
o Does not mature

“Consideration” means how much we are willing to exchange the instrument. It also
means discounted amount or price.

The price of a BOND is always quoted as a % of Nominal e.g. if the price is 102% and
nominal (Qty) is 150,000 then Amount of the trade is 102% x 150,000 (premium) but if
98.5% of 150,000 it is considered a discounted security.

T24 FLOW

SECURITY.MASTER determines the type of security – SHARE or BOND e.g. if CBN

announces a sale of Treasury notes, the bank will first create the characteristics of the
Bond in SECURITY.MASTER. Please note that no accounting entries or trading is
taking place yet. This is just to record the basic information about the Bond or Shares in
the system waiting for when a customer will come to buy or sell.

- Free format ID

SEC.ACC.MASTER (SAM) – Keeps portfolio (Bond & Shares) for Customers or

Banks.

- ID = Customer Number & Sequence Number

- Field 36 (DEALER.BOOK) tells the system whether it is OWN.BOOK or for
TRADNG
- This Portfolio file allows you to define a record attributes for all the business that
a customer will deal with the bank in. All customer investments in the bank
(Loan, AC, LC etc) can then be linked to the portfolio record set up in this table.
- E.g. A Customer of the bank who is interested in Microsoft Shares will have a
record set up for him here as discussed with him. Note that it is just a simple
portfolio that is set up here, there is no link yet with any product of type of shares
the customer may be interested in.
-
Prior to creating SAM, the customer record must be created first, followed by
CUSTOMER.SECURITY record where the customer type (multiple) is specified. For a
customer who acts as DEPOSITORY, the CUSTOMER.CHARGE record must be updated
accordingly (field 8 – DEPOSITORY.GROUP) – This condition will be used by the
system when calculating safe-keeping charges for the depository.

SEC.OPEN.ORDER (SOO) / ORDER.BY.CUST – This is where the selling and

buying of stocks begin whereby a RM (Relationship Manager) after discussing with a
client who is interested in buying or selling his share, record details of the share –
Nominal, price (whether at BEST price or Market Price, Expiry Date) etc. A jBASE
concat file “F.SC.DEALER.UNFONF” is updated in T24 for the security i.e. SM so that
the system knows how many stocks is opened for each security type (e.g. Microsoft) and
that requires the dealers’ attention. Generally speaking there two legs to buying/selling of
securities – the purchaser side and the seller side (which is usually a broker when buying
stock for bank customer). Orders can be placed for multiple customers through one
broker or for one customer through multiple broker.

The next action is done by the DEALER who then determines whether the asset (share or
bond) as recorded in SOO by the RM is to be sought for or sold at Limited Price or can
be made at Market Price and then place the order with a broker in the market who then
fills the order. Suppose it is a share to be bought for the bank’s customer, she will execute
the orders once the broker confirms availability and pricing as agreed. This step is done
in T24 through one of the following ways

- Set the SOO record status to TRADED (Field DEAL.STATUS). The system will
raise a SEC.TRADE transaction online in IHLD status and once input and
authorised accounting entries are raised.
- Set the SOO record status to TRANSMITTED (Field DEAL.STATUS). The
system will raise a SC.EXE.SEC.ORDERS entry waiting for execution to take
place. This means that the security has been placed / transmitted to the broker and
waiting execution. After the broker confirms the order has been accepted, the
dealer then executes the order by changing the status of the SEOO record to
‘ACCEPTED’ or REJECTED if it did not go through. Once accepted and the
SEOO record authorised, a SEC.TRADE record is created automatically online
and the SEOO entry is deleted.

SEC.TRADE – This is where the selling and buying of stocks is done (Trading)
manually. Any booking done here will reflect in the account immediately. Not until
SEC.TRADE is done before a confirmation is given that a security is been done and
accounting entries raised or prepared

-
 CUSTODY PROCESS FLOW

- All types of security that the bank engages in must have first been set up in the system.
T24 allows a business flow whereby a skeletal security details can be captured leaving
the rest for the back office to complete
- Customers on whom we maintain custody is first set up in T24
- Customer Portfolio(s) is there after established for the customer
The T24 process can be looked at from three functions viz:
a) Front Office (where Ordering instruction is given)
b) Middle Office (where order grouping and execution takes place)
c) Back Office (where authorisation queues are monitored and approval given)
including accounting entries, Vault Control, Transfers for Positions

- Ordering is then done (Buy or Sell, Switch) by the RM/Portfolio Manager. Ordering can
be done for Single Customer or in Bulk (Multiple Customers) for later distribution
The process flow here depends on how the bank (user) intends to operate. T24 supports
a STP where orders will await execution by the Dealer and status can be updated
(ACCEPTED,REJECTED etc)
T24 may also be requested to confirm a trade automatically in which case a confirmed
deal is raised online and positions updated without dealers' input
- At any time in the day, either the RM or Dealer can check positions of each security
traded. For example the RM can view a list of rejected deals
- There is also a facility to group certain orders together for purpose of transmitting to
Dealers for Execution
- The back office function

- For DEPOSITORY, t24 allows for generation of statement on regular frequency

(MT549). DEPOSITORY is a place usually a bank where securities are deposited e.g. it
is usually the National Bank of most banks
Diaries and Entitlements are also well taken care of (Corporate Actions) as positions are
maintained online

Positions are updated online

charging structure to be defined in CUSTOMER.CHARGE (based on definition in
SCSK.GROUP.CONDITION - SCSF.CHARGE.PARAMETER)
Safe custody fees calculated are kept in SAFEKEEPING.HOLDING for review before
posting

While defining the portofolio (SAM), the charge is defined in field SAFE.CHG.SCALE

SC.PORT.COMPARE SC.GROUP.COMPARE

ORDER.BY.CUS SC.PORT.ORDER SC.SECURITY.ORDER

SEC.OPEN.ORDER

SC.EXE.SEC.ORDERS

SEC.TRADE

Portfolio Transfers
Securities can be transferred in one of the following ways in T24
- Transfer from Own Book to a customer of the bank or external customer
(SECURITY.TRANSFER)
- Transfer from Customer to the bank’s portfolio(SECURITY.TRANSFER)
- Transfer between Depositories (POSITION.TRANSFER)
- Transfer between Portfolios (POSITION.TRANSFER)
-
-

REPO
A REPO is a 'Sale and Repurchase agreement' where securities are sold to the
counterparty at a fixed price and the seller has a commitment to repurchase those
securities at a pre-determined price at a fixed point in time in the future.

The price difference can be seen as the interest to the deposit (or loan if reverse repo),
and may be defined as a cash price (the buy back amount) or as a rate (the repo rate).

A Reverse Repo is the opposite of a Repo.

Thus for the two parties in any Repo deal, it will be a Repo deal for one party and a
Reverse Repo deal for the other. The two parties are usually referred to as the "seller"
and the "buyer" to avoid confusion. The 'seller' is the party who receives cash and
delivers securities, and the 'buyer' is the one who makes the loan and receives the
securities.

The GLOBUS REPO module supports the recording, processing and administration of
both REPO and Reverse REPO transactions. It incorporates these transactions into the
Limit, Accounting and Position Management modules within GLOBUS and supports a
wide variety of repo and reverse repo types, such as:

Bond repo
Gilt repo
Equity repo
Bilateral repo
Trilateral repo
Cross currency repo

It also covers options such as:

Multiple securities
Substitution of securities
Early maturities
PSA/ISMA Agreement
 ACCOUNTING ENTRIES

Discounting of Security

For a security whose PRICE.TYPE field “DISC.INSTRUMENT” is set to Y, the

Consideration (which is the amount paid for an instrument) is calculated thus

Consideration Amt =
Nominal or Quantity x ( 1 – (Days Remaining x Rate) / Year Days)

The daily Discount that is to be accrued or amortised (depending on whether the

discount is paid upfront as specified in the application SAM field
POST.DISC.UPFRONT) is calculated as follows

Discount Amount per day = (Nominal - Consideration Amt) / Days Remaining

Example:
Security with a face (maturity) value of $100,000 bought with 100 days remaining until
maturity - dealt at a discount rate of 5% using a 365-day calculation basis –

Consideration = 100,000 x (1 – 0.01369863013) = 98.630.14

Alternatively, you could also work it backward first by calculating the Discounted
Interest and then subtracting it from the Nominal (Principal)

Discount Accrual per day = (100,000 – 98.630.14) / 100 = 1,369.86 / 100 = 13.70

Discounting of Security at Yield

If the same security is bought at yield, the calculation is a little different as given below
for PRICE.BASIS field as EXC.ACCR:

Consideration =
Nominal or Quantity / (1+ (Days Remaining x Rate)/Year Days)

And so for the example above, the consideration is given as

Consideration = 100,000 / (1+0.01369863013) = 98,648.65

Necessary Fields for Discount / Premium

- SEC.ACC.MASTER>DISCOUNT.CAT
- SECURITY.MASTER>POST.DISC.UPFRONT
- SECURITY.MASTER>DISCSOLD.TO.REALPL
-

KCB SETUP

TREASURY BILLS
- As Discounted products
- PRICE.TYPE = YIELD or DPRICE depending on which one works better
- Usually priced at a discount i.e. the % of price specified is always < 100

BONDS
- As Premium or Discounted
- PRICE.TYPE = DBOND
- Bonds bought at Premium will usually have its price expressed > 100%
-

T24 is able to calculate the Yield of any security by doing the following:
- Enter the Issue Price in the SM (e.g. for a bond to be purchased at 95.4)
- Ensure that REDEM price is set (mostly to 100)
- Validate the record
- The system will calculate Original Yield (F147) which can then be used during
SEC.TRADE input.
- Note that this yield may not agree with that computed internally by the bank or
the Central Bank but it will help in arriving at correct Consideration during trade.
- For Uganda, the appropriate price type is DPRICE

Note that price is always expressed as a percentage of Amount of Facility purchase or

Sold

Dirty Price: This terms means Clean Cost + Accrued Interest only

There are three components to a sale or purchase of Securities (Bond types)

 - Price: which explains how much it is bought and will generally be expressed as
unit of quantity or
- Nominal or Quantity
- Value / Estimate / Cost

An individual selling a security could make gains/profit from such sale while at the same
time the interest/discount from the same is the main source of income for holding the
bonds or bills depending on for how long is being held

http://www.centralbank.go.ke/securities/bonds/Introduction.aspx

IMPLEMENTATIO NOTES

The following tables are to be set up

1) CONDITION.PRIORITY (SC.TRADING/SC.SAFEKEEPING/SC.MANAGEMENT)
2) APPL.GEN.CONDITION
3) SC.PARAMETER
4) SM.PARAMETER
5) AM.PARAMETER
6) SC.STD.SEC.TRADE
For Sec Trade conditions
7) SCTR.GEN.CONDITION
8) SCTR.GROUP.CONDITION
9) SCTR.CHARGE.PARAMETER
For Portfolio Management Fees setup
10) SCPM.GEN.CONDITION
11) SCPM.GROUP.CONDITION
12) SCPM.CHARGE.PARAMETER
For Safe Keeping Fees setup
13) SCSK.GEN.CONDITION
14) SCSK.GROUP.CONDITION
15) SCSF.CHARGE.PARAMETER

16) SC.DEL.INSTR
17) COUPON.TAX.CODE
18) SAFECUSTODY.VALUES
19) CUSTOMER.CHARGE
20) CUSTOMER.SECURITY
21)

Other Notable files for investigation / troubleshooting

1) SC.TRANS.POS.HISTORY (Holds history of Accruals)

2) SECURITY.POSITION
 3) SC.TRADING.POSITION (Similar to the BALANCES file only for Own
Books)- The table and EB.CONTRACT.BALANCES have the same key
4) SC.SETTLE.DATE.CONTROL
5) SC.POS.ASSET (F.SC.POS.ASSET)
6) SC.ADVISORY.CHG ( Contains information for last portfolio charges)
7) SC.ADVIOSRY.CHG.POSTED (Contains portfolio charges per month
8) SC.SAFEKEEP.HOLDING (Contains information for applying Safe Keeping
charges)
9)

Notable BATCH jobs

1) SC.TRADE.POS.ACCRUAL
2) SC.ONLINE
3) SC.BATCH.APP
 CUSTODY
- CHARGES
1) If field SAFEKEEP.CHRG.ACC is not specified in SAM and the
SAFECUSTODY.VALUES parameter indicates that customer is not to be debited
(Field 12 = POST.CAHRGES = NO for the charge type SC & IC in addition to
field 15 which indicates what type of managed account to charge), the system
suspends Portfolio Management (Advisory) and Safe Keeping fees by creating
necessary details in the following application using the account record
SUSPSCDR of ACCOUNT.CLASS application (usually category 14185)

a. SC.ADVISORY.CHG (Contains information for last portfolio charges)

b. SC.SAFEKEEP.HOLDING (Contains information for last safe keeping
charges)

Actual posting can then be done manually by the user through the application
SC.ADV.FEES.POST or SC.SAFE.FEES.POST which will then transfer the
records to an internal table for record purpose.

c. SC.ADVIOSRY.CHG.POSTED (Contains portfolio charges per month)

2)
3)

- TAXES
1) The following tables are important in setting up applicable taxes
- TAX.TYPE
- TAX.GEN.CONDITION
- TAX.TYPE.CONDITION
- COUPON.TAX.CODE
- TXN.TAX.CODE (Only for Customer Book and Not Own Book).
 This code is then linked to the SECURITY.MASTER record
(field 139 – TXN.TAX.CODE)

Subsequently, once a customer record is created, the CUSTOMER.CHARGE

table is updated

- COUPONS & REDEMPTIONS (DEBT INSTRUMENTS)

The T24 BATCH job SC.ONLINE is responsible for generating entitlements during
COB. The jobs under this batch are as follows:
- EOD.DIV.AUT.REQ (processes coupons for all forms of Bonds i.e. SM = B and
generates DIARY records for later authorisation and entitlement generation)
- EOD.AUT.REDEM.REQ (processes Redemptions for all Bonds in the system and
generates DIARY event records for later authorisation & entitlement generation)
- SC.BATCH.DATE.CYCLE
- SC.SOD.DIA.AUTH (Authorises all generated DAIRY)
- SC.SOD.APPLY.DEF.INSTR (
- SC.SOD.ENT.AUTH (Generates entitlements records)
- SC.SOD.ENT.AUTH.POST (post entitlements)
- SC.CLEAR.FILES (do file clean ups)

Once the BATCH job runs, the corporate action service SC.CORPORATE.ACTIONS
must be run next to complete the process of the DIARY events and entitlements
generated shall be waiting for authorisation and eventual settlements

The above jobs rely on two parameter files

- SC.CA.PARAMETER: where it gets the version name being used for raising
entries)
- SC.STD.COUPON: Where all category codes, types etc are defined for coupon &
dividend
- SC.PARAMETER:
o F39 = COUPON.TYPE: defines the DIARY.TYPE the job is to use for
generating coupons
o F44 = REDEMPTION.TYPE: defines the DIARY.TYPE the job should
use for generating Bond redemption
o F47 = JOB.NAME: defines the COB job that will process coupon &
entitlements as well as other standard reports. The key jobs here are two
viz:- EOD.DIV.AUT.REQ & EOD.AUT.REDEM.REQ which refer to two
of the jobs above
o F48/F49 = START.DATE & END.DATE: defines the period within which
the above job should consider for processing. Care must be taken not to
set these dates far in advance otherwise coupons/redemptions may never
be generated.
o Fields 63/64/65 = CUST.ACT.SUSP.CAT: All Suspense accounts under
these fields must be opened prior to trying to run corporate action or
expecting entitlements to be generated during COB. Same applies to
equities
 o
- Note that KCB Treasury Bills have zero coupons
-
- EQUITIES
Equities unlike Bonds are settled online and entitlements processed online as well. No
COB is required to see security movements or effect of corporate actions as long as value
date and payment date is set to the correct dates. However worthy of notes are: correct set
up of SC.PARAMETER & SC.CA.PARAMETER as highlighted above.

- INTERNAL TABLES USED BY CUSTODY

The following internal tables are in use by T24 during processing
- SECURITY.POSITION (like the BALANCES file available in other modules)
- SECURITY.TRANS: contains all transactions contributing to positions
- SC.POS.ASSET (Contains all net position of assets and liability movements on
any security
- SEC.TRANS.INFO: SC application transactions history including entitlement, sec
trade, security transfer, position transfer etc. Note that the ID is the individual
transaction and the application that generated the transaction. Where a transaction
generates two, the references are stored.
-
- SC.TRADING.POSITION (Similar to the BALANCES file)
- SC.TRANS.POS.HISTORY (Holds history of Accruals)
- SC.SETTLE.DATE.CONTROL
- F.CONCAT.DIARY (contains list of diary captured online for processing by the
corporate action service. Mostly used by equities)
- TRN.CON.DATE (A CONCAT table for every online transactions from transfers,
trades, etc – used by the system to calculate the position of the nominal value by
comparing history of transactions and closing balance
(CLOSING.BAL.NO.NOM) stored in SECURITY.POSITION table. It is to be
noted however that security transfer is not considered as update to net security
positions for purpose of corporate action/coupon and may be position transfers as
well
- SC.RIGHTS.WORK
- SECURITY.TRANS
-

- Custody Accounting
The accounting in custody can be broadly classified as follows:
- SEC.TRADE (with ACTUAL settlement set in SC.PARAMETER):
o Once a Sec trade is committed and authorised with a value date in the past
or today, the system carries out the accounting as follows:
 DR: 14196 (Customer A/C Susp in SC.PARAMETER)
 CR: 14197 (Broker A/C Susp in SC.PARAMETER)
The explanation for this is that the customer is paying for the security and
so his account needs to be debited in our book while the broker’s account
 in our book receives the credit. As actual settlement is being considered,
the actual customer accounts are not to be affected, hence the suspense
accounts corresponding to each entry is used until settlement is manually
done.
o The next step is to settle the trade using the application
SC.SETTLEMENT. This then creates the following accounting entries:
 DR: 14197 (Broker A/C Susp in SC.PARAMETER)
 CR: 14196 (Customer A/C Susp in SC.PARAMETER)
 DR: Customer Portfolio A/C (as set up in SAM/SEC.TRADE)
 CR: Bank’s NOSTRO A/C (NOSTRO.ACCOUNT for the ccy)
- Coupon Payment Due / Sec Maturity / Self Defined Diary Events:
o When coupon of a security is due for payment, the system will by default
during COB generates Diary and ultimately entitlement records for users
confirmation and settlements. And if maturity is reached, it includes
records for REDEMPTION. The set of activities are performed by the
BATCH SC.ONLINE. At this point no accounting entries are raised
o The next step after COB is to settle the entitlements using the application
SC.SETTLEMENT which then creates the following accounting entries:
o
o
When coupon of a security is due for payment, the system will by default during
COB generates Diary and ultimately entitlement records for users confirmation
and settlements. And if maturity is reached, it includes records for
REDEMPTION. The set of activities are performed by the BATCH SC.ONLINE

o Once a Sec trade is committed and authorised with a value date in the past
or today, the system carries out the accounting as follows:
-
- The explanation for this is that the customer is paying for the security and
-
-
DIARY EVENTS

When a DIRAY record is authorised, the following activities take place

- SC.ENT.WORK record is either created or deleted depending on the function
carried out – if REVERSAL, it is deleted
o ID = R.NEW
- SC.DIA.REV.WORK record is created if REVERSAL
o ID = R.NEW
- SC.CON.ENTITLEMENT record is created
o ID = R.NEW
- Service record SC.CORPORATE.ACTIONS for the company is automatically
started
- Once all correct tables are well populated, the SC.CORPORATE.ACTIONS
service will generate appropriate entries
- In creating the entitlement records by the corporate action service, the system uses
the information in SECURITY.POSITION table to determine the balance of each
security for the depository indicated in DIARY under each portfolio and process
them accordingly. It is only securities with balances that get processed.
- Versions for raising necessary DAIRY & ENTITLEMENT entries are stored in
the application SC.CA.PARAMETER. T24 uses OFS source
ENTITLEMENT.OFS to create the ENTITLEMENT records
-
Diaries are automatically generated by the system at COB by the batch SC.ONLINE job
EOD.DIV.AUT.REQ for COUPON & REDEMPTION both for Custody and Own
Books. If diary is not generated by the system during COB, the reason is due to the set up
of dates in SC.PARAMETER for each of the JOB.NAME fields

NOTES:
1) In case a corporate action is not calculated for a particular customer, or security,
check the following:
a. That the SECURITY.POSITION record being selected has balance i.e has
holdings in which case due for entitlement
b. That the CUSTOMER.SECURITY record (field 24 =
CORPORATE.ACTIONS) is set to YES for inclusion during corporation
actions processing
c. More importantly, that the following have been setup
i. Suspense accounts as set up in SC.PARAMETER for customer,
Broker & Misc (fields 63 – 65).
ii. That all SC files have been created including internal files. If
uncertain, releasing the SC products again may be helpful.
d. That the Rate (field 16) is set correctly as this could lead to zero cash
redemption amount being generated in ENTITLEMENT
2)

Other tables are:

SETTLEMENTS

When a DIRAY record is authorised, the following activities take place

SC.ENT.WORK record is either created or deleted depending on the function

OTHER IMPORTANT SECURITY TABLES

- PORTFOLIO.CONSTRAINT (For limit setting for Issuer of securities e.g. bonds
etc)
-

SWIFT MESSAGES
DEPOSITORY
- MT540 – 543 (Sent to the depository)
-
BROKER
 - MT502 / 513 / 515 / 518 (Sent to the broker)
-
COUNTERPARTY
- MT103 / 202 (Sent to counterparty for settlement of delivery)
-

SC ACCOUNTING

1) ACCOUNT.PARAMETER (for TRADE DATED/ VALUE DATED) for Security

Trading
2) STOCK.EXCHANGE (set up will determine the Value Date to default during
Trading e.g. +1 or +2 days)
3) SC.PARAMETER (for TRADE DATED/ VALUE DATED). This flag dictates
how the system determines the cost of securities when calculating entitlements or
outstanding balance computations. It can either be TRADE which means cost of
portfolio/security is based on actual date the trade took place. The opposite is
based on when it was given value / settled i.e. when accounting took place.
4) SC.PARAMETER: (Because of late delivery of actual transfers on value date,
accounting / positions update can take place on settlement date (ACTUAL) as
against CONTRACTUAL". This is controlled by the field
“ACTUAL.SETTLEMENT”
a. ACTUAL: Actual implies that whenever trade is done (SEC.TRADE),
settlement must be done before accounting can take place. In a similar
vein, Entitlements generated by T24 must be followed by settlement
before actual accounting can take place. This implies accounts are not
impacted until settlement activity is done.
b. CONTRACTUAL: In contract scenarios, anytime sec trade is carried out,
accounts are updated immediately. Similarly, entitlements automatically
settle immediately they are authorised.
c.
5) SC.SETTLEMENT: This application is used to effect settlement of entitlements
and or sec trades
6) If importance is that no entitlement will be generated for a transaction captured on
the same day that Coupon is due. E.g. if field INTEREST.PAYMENT.DATE in
SM is 2009116 and a SEC.TRADE or SECURITY.TRANSFER is captured on
the same day, the system does not take the trade into consideration when
computing coupon. The following tables are necessary for determining the closing
balances of a position
a. SECURITY.POSITION
b. TRN.CON.TRADE.DATE
c. SECURITY.TRANS
d. SC.SETTLE.CUST
e. SC.SETTLEMENT$NAU
f. SC.POS.ASSET
g. SC.TRANS.POS.HISTORY (Own Book)
h. SC.TRADE.POSITION (Own Book)
7) COUPON Accounting: For Own Books, the system automatically moves the
receivable Interest on Coupon from the GL receivable line (SPEC) to a suspense
account that is internal a/c as below. Recognition of this income is therefore
manual:
a. The system carries out 4 updates to the ENTITLEMENT record created
for each portfolio / security in the following order
i. Leg I:
DR: KES1419700010001 (SC Brokers Susp)
CR: KES1250500010001 (CPN Receivable Susp)

ii. Leg II:

DR: KES1418200010001 (SC Corp Action Susp)
CR: KES1419700010001 (SC Brokers Susp)

iii. Leg III:

DR: PL51000 (Reversal of Accrued Income as ADJUSTMENT)
CR: SPEC (to reverse from receivable leg)

b. The bank carries out the following manual entries to complete the coupon
interest payment:
i. Leg I:
DR: KES1250500010001 (Coupon Receivable)
CR: PL51000 (To recognize the income that was reversed)

ii. Leg II:

DR: NOSTRO (as income in our NOSTRO with Central Bank)
CR: KES1418200010001 (SC Corp Action Susp defined for the
type of diary event in DIARY.TYPE)
 c.
d.
8)
9)

MT 102 FROM CBK AS STP – KCB

As the CBK will be sending settlements MT102 (multiple) for coupons and Redemptions
of Custody securities through swift, the entitlements generated by T24 become irrelevant
and must therefore not be authorised to avoid double payments to customer accounts.

Own book portfolios with CBK are automatically credited to the bank’s account at CBK
and only MT910 is sent to advise the bank of the transaction. Unlike in the case of
custody where the bank is only a custodian of the books for the customers who needs to
be credited in KCB book.