Transfer Pricing (Spread on Internal loans)

It is possible in TS to set up transfer pricing rules based on a credit rating for each subsidiary. When entering loans and deposits TS will automatically suggest a spread based on the rules. 

Master data / Tags

Set up a new Tag "Credit rating" and add all your rating values in the new list. Mark the new Tag as Company tag and remove deal part tag.  The new Tag will then only be visible in Companies. 

Master data / Companies

Enter the correct credit rating for each subsidiary. 

Risk management / Transfer Pricing Rules

Permission needed

To enter and update rules: 'Update transfer pricing rules'.

In Deal input when entering Loans: 'Read transfer pricing rules' and 'Price Subsidiary Requests'

Add a rule for each credit rating and if applicable currency and maturity.

Note! It is also possible to select if the spread should apply to both Loans and Deposits or just Deposits for example.

Begin - From which date the rule should apply

End- If you would like to keep history of changes set end date when the rule do not longer apply

Currency- if it should be a specific spread for a certain currency ( default All)

Maturity Period - if it should be a certain spread for a specific maturity period ( Default All).

Spread- the spread in % that will be added to the interest

Example: 

All maturities from O/N up to 1Y will get spread 1and all maturities above 1Y will get spread 1,2

Enter new loan or deposit

In the wizard TS will automatically suggest the spread based on transfer pricing rules. 

Update spreads on existing deals

Setup a Transfer pricing activity in the Autopilot

Select which deals/transactions that you want to update the spread for. 

For example Value date from a specific date.

The transfer pricing rules can be prepared in advance. But the rule that is active at the time when the activity is run  (run date) will be used.

In the example below the second spread will be used when the activity is run 2024-12-31 or later. Transactions with Maturity date equal or greater than run date will be updated.