Settlement Delivery Instructions for Physical Commodities
Below is a guide for configuring SDI's in Calypso for use with Commodity Forwards with and without certificates via the use of Static Data Filters and SDI priority rankings.
Create agents for each storage location. The legal entity must be set up with the role of Agent and have at least one Contact established. (From Calypso Navigator, choose Configuration > Legal Data > Entities....)
You may also create a legal entity for "undelivered" agricultural products and certificates. The Agent will act as the "Storage Location" for physical deliveries that have not been assigned a location.
Next, create Settlement Accounts for the Location/agricultural product and also a general one for undelivered agricultural products. (From Calypso Navigator, choose Configuration > Accounting > Accounts.) Below is a sample settle account for undelivered White Maize.
Next, you should create Static Data Filters for every Location / agricultural product. (From Calypso Navigator, choose Configuration > Filters > Static Data Filter.) Below is an example of one setup.
When configuring SDI's for Physical Agricultural Commodities, the use of the attribute Commodity Location in the SD Filter is recommended to route certificates to different locations if desired. Therefore, based on the counterparty and the location of the certificate traded, certificates can automatically be delivered to the appropriate accounts.
(Static Data Filters can be created with or without Certificate Grades.)
You can add whatever extension you prefer to the UNDERLYING_SEC_CODE. In the case above, CommodityName was used. To do this, from Calypso Navigator, select Configuration > System > Domain Values.
After the Domain Value is added, it needs to be added to the Product Code window for the product type of Commodity.
(From Calypso Navigator, choose Configuration > Product > Code.)
Once it has been added as a product, you need to be sure to associate the desired commodity name with the commodity. To do this, open the Commodity window. (From Calypso Navigator, choose Configuration > Commodities > Commodities....)
Now, you can create SDI's and use the new static data filters where appropriate.
You must define SDI's for the counterparty and the processing org with the SAME settlement method. In this example, 'AGRI_CERT" is used as the settlement method for the settlement instructions for the Processing Org. (From Calypso Navigator, choose Configuration > Settlements > Instructions.)
The Priority ranking allows the system to select the proper SDI's for delivered certificates, undelivered certificates and/or a combination of both if a partial delivery is captured on a Commodity Forward.
Since a certificate at a location will be eligible to use the SDI for that location, as well as the more general SDI for the undelivered location, the location specific SDI should have a higher priority than the undelivered. Higher priority corresponds to a lower number.
In the above example, a delivered SDI would have a ranking of 0.
Below is a sample of a partially delivered forward.
The transfer rules for the trade show three rows: one for the delivered certificate which uses a priority of 0, another for the forward (cash) SDI and a third for the undelivered certificate which uses the priority of 1.