Use the Cparty Limits tab region of the Limits window to define counterparty limits for a company. A counterparty limit specifies the maximum amount a company is willing to risk when making deals with a particular counterparty.
You define counterparty limits by assigning a global limit to a counterparty and specifying the amount you are willing to risk on the counterparty. For example, you could assign a global funding limit to a counterparty with which you make funding deals, and specify a 500,000 USD limit. When you make a funding deal with this counterparty and assign the funding limit to the deal, Treasury automatically calculates the limit utilization of the deal and adds this number to the existing limit utilization total of that counterparty limit. If a deal causes you to exceed the 500,000 USD counterparty limit you specified, you receive a warning.
When you enter deals, you can only choose the limits associated with the counterparty. Assigning a limit to a deal leads to utilization of both the counterparty limit and the global limit associated with that counterparty limit. Because of this, the limit utilization of a deal is charged to both the counterparty limit and the global limit, and the deal may cause either or both limits to be exceeded.
Note: The limit utilization of the deal is charged against the other limits that you have activated, such as currency limits or daily settlement limits. However, you do not specify these limits when you make a deal.
The global limits from which you can choose when you create a deal are also restricted by the type of deal:
FX category limits are available across all deal types and subtypes.
Fund category limits are available on subtype Fund deals.
Invest category limits are available on subtype Invest deals.
Overdraft category limits are available on Current Account Balances only.
You can define multiple counterparty limits for a counterparty by assigning the corresponding global limits, for example, defining two funding limits and an investment limit for a counterparty.
Define global limits. See: Defining Global Limits.
If you are defining global limits that include descriptive flexfield information, define the descriptive flexfields that you need. See: Defining Descriptive Flexfields.
Navigate to the Limits window.
Choose the Cparty Limits tab.
Query or enter the Company that you want.
In the Cparty field, enter the counterparty to which you want to assign a counterparty limit.
In the Limit Code field, enter the global limit code to use for this counterparty limit.
If necessary, enter an Expiration Date for this counterparty limit.
To use this limit, enable the Authorized check box.
In the Limit Amount field, enter the maximum amount you are prepared to risk on this counterparty for this limit type. If this counterparty limit represents a facility, enter the credit line for the facility. Enter limit amounts in the reporting currency.
In the [] field, complete the descriptive flexfield information as necessary, such as to enter facility information.
If necessary, use the Attachment function to attach a document to this counterparty limit, such as a facility agreement document.
Save your work.