This describes how to roll over a foreign exchange transaction.
WHY IS THIS IMPORTANT?
Rollover Foreign Exchange contract is important when an organization has no intention of taking delivery of the currency bought and decides to roll over.
1. From the launch screen on the Foreign Exchange module, choose the Accounting Centre and VDate From where the transaction to roll over can be found. Click Refresh.
2. Choose the trade to roll over by checking the tick box before their Trade IDs and click Rollover. In this example, FRX100016.00 will be rolled over.
3. In case of multiple transactions, ensure that the trades have the same buy and sell currency pair, value date and counterparty.
4. The Rollover Foreign Exchange screen launches.
5. Fill in the fields. Those with an asterisk (*) are mandatory.
6. Key in the TDate. This is defaulted to the system’s date.
7. Roll Rate is defaulted to the contracted rate of the original FX trade. In the case of a FX rollover, the system will create a trade to cancel off with the original trade. This rate will be used to book the cancellation trade. This rate can be changed.
8. Enter a new VDate to roll over to.
9. Enter the buy/sell transaction amount.
10. Then, key in the spot rate and forward rate for the new rollover trade.
11. Click Add. The rollover will be displayed on the right.
12. Click Book/Update. When a popup appears, click Yes to confirm.
13. Go back to the launch screen of the Foreign Exchange module. The transaction FRX100040.00 is created to cancel off with the original trade FRX100016.00. At the same time, FRX100041.00 is created as a new trade for the rollover. The system also marks the trades with a flag which signifies that the transaction is Rolled To or Rolled From.
14. To view or amend the rollover trade, click on the flag Back Rollover on the rollover transaction, and the screen below will be displayed. On this screen, unlimited roll back or roll forward on the original date can be done.
15. To amend the existing rolled trade, tick the delete checkbox of the existing rolled trade and enter a new roll trade at the fields provided in the screen below. Repeat the steps from 6 to 12.
Note: System does not check limit breach in the case of rollover.
FREQUENTLY ASKED QUESTIONS
FAQ01. I cannot roll the trade again.
Trades rolled over cannot be rolled again. The previous roll needs to be deleted first and then the rollover re-booked.