How do I manage the Novation of trades?
Scenario:
- Novation
from my organisation to one of my other organisations i.e. a contract
originally closed by Party A will be novated and transferred to Party B.
Both companies belong to the same organisation group, and are mapped as
internal legal entities on CMS.
- Novation
from my organisation to an external entity. On day X, a contract
originally closed by Party A will be novated and transferred to another
counterparty (Party C), which is out of CMS scope.
Novation from my organisation to one of my other organisations
A trade with UTI 123 and counterparty A (i.e. Party A) is novated to a trade with Party B.
Full novation (original trade will not exist further, new trade has all volume of the original trade)
- “C” for the original trade 123 with the early termination date set to the date the new trade is executed
- “N” for the new trade 223 with execution date equal to the early terminated trade and Party B
Novation from my organisation to an external entity
- “C” for the original trade 123 with the early termination date set to the date the new trade is executed by Party A
- “N” for the new trade 223 with execution date equal to the early terminated trade and Party C to their RRM of choice
It is good practice to send the UTI of the novated trade and it is possible:
In CpML clients can use
CpmlDocument/Reporting/Europe/EURegulatoryDetails/LinkedTransactionInformation/LinkedTransactionID
In ACER XML it is
ait1:REMITTable1/ait1:TradeList/ait1:TradeReport/ait1:linkedTransactionId