Commercial Paper

[Former Member]

Hi,

My client needs to represent Commercial Paper in the Securities module. Which Prouct type should I use? Should I use 04X? If I use 04X, then should I give Interest rate as 'Zero'? In that case nothing gets booked to interest when i post the flows?

Please advise.

Kalyan

[Former Member]

Hi Kalyan

Commercial Papers are a standardized product and they should be handled in the Money Market Module. Commecial Papers are discounted papers meaning that the investment is the fixed amount minus the interest earned for the start amount. Commercial Papers do not have a security number (ISIN, etc.) and therefore it does not make sense to handle them in the securities module.

Regards

Juerg

[Former Member]

by the way the product type is 53a

[Former Member]

Hi Juerg,

Thank you for your response.

There are some discounted instruments, issued by Government Agencies like Quebec Provice in Canada and many other agencies, which have cusip/isin numbers. These are to be tracked in Securities Module because it passes through our custody account and the custodian is responsible for settlement. So we cannot use the money market product type 53A.

Kalyan

[Former Member]

In this case, but this is not a commercial paper, you have to use the security module and use a product type where you can have discounted interest (04J with condition type 43 Zero bond. Then you also have to set up the instrument with the transaction code FWZZ. The valuation then has to take place with a market value and TPM1.