FX Hedging Rules

Start > Settings > Setup > FX Hedging Rules

In FX Hedging Rules the groups Hedging policy can be set up. It can be one or several rules depending on how the policy is designed. 

There could be several rules and this is the order Treasury Systems reads the rules. To add a rule press the + sign and then start to add the different options below.

Name- Choose a suitable name

Description-to describe the rule

FX Exposure setting- There are three options available, 

• Back-to-back: will suggest FX deals based on each exposure deal, will not net any deal.  
• Net within rules: . will net by legal entity, currency and hedge date (payment date, start/end of time bucket for example within one rule). 
• Net all rules: will suggest deals based on deals netted on all rules entered in FX heding rules. 

Selection- make a all exposure and FX hedges that should be included when calculating the FX hedging percentage. 

Hedge Currency - Which currency you should hedge against. You can chose the accounting currency or a specific currency.  If there is a exposure in EUR should it be hedge against the legal entities accounting currency or always a specific currency. 

Internal/external- External means that the suggested deals will be hedge with an external counterpart via a trading station.  Internal means will suggest and create an internal FX request.

Date rolling behavior- if the maturity date is on a holiday this setting decides which day the suggested deals maturity date will get, Preceding=the day before, Following=the day after the holiday. This is because some trading stations will not execute the deal if it is on a bank holiday. 

Bank holiday calendar- If any other bank holiday should be considered besides the ones in the currency pair e.g. USD.

Create deal as status- New or Approved, If the deal suggestion should be new and needs to be approved by a trader before it is sent to the trading station or automatically approved and and sent. If combined with Condition expression below it can be based on the amount. All suggestions above 100 MSEK needs to be manually approved by trader. 

Trading station- Choose trading station. 

Upload trade type: select Single or Block trades, Block trades means that all FX deals uploaded with same currencies and same day will get the same FX spot rate and same counterparty but with different swap points depending on maturity. Advantage is to not have a lot of deals with different FX spot rate and with different counterparties. If singel is choosen each FX forward will be done with different FX spot rates and different counterparties. 

Condition Expression- Conditions on amount, currency and maturity date could be set. For example if you want a maximum or minimum amount of the suggested trades. 

The example below - Deals equal or above 20 000 000 needs an approval before they are sent to a trading station. Deals below 20 000 000 will be approved automatically.