Treasury Trading for Cash Trade Requests via
Trading Platforms
Cash Request
In the Manage Memo Records app, you can create cash requests
with an approval process, which will later trigger trade requests in
treasury and risk management systems.
The process to manage trade requests on the SAP Cloud Platform is
equivalent to the trade requests coming from hedge requests in SAP
Treasury and Risk Management.
For the outbound process, trade requests can be split, grouped as
block requests, or handled as phone trades.
These trade requests (other than phone trades) are sent to an
external trading platform (for example, 360T), where the orders are
placed and an offer is accepted. The completed trade information is
later imported to the SAP Cloud Platform and matched against the
trade request.
The cash request is a communication channel between a cash
manager and the trading department. When a cash manager would
like to do foreign exchange, he has to ask the trading department
for an FX deal. The cost of information transfer, confirmation, and
approval is quite high. The cash request scenario provides end-toend support for this process.
The cash manager initiates the cash request with foreign exchange
information. After checking by both the cash manager and trading
department, the cash request is released to the trading department
with a trade request. When the deal is created via trading platform
or manually, the cash request is fulfilled. Cash request impacts cash
position for better forecast.
A cash request entry is split into cash forecast inflow and outflow
under corresponding bank accounts according to its receiving and
sending information. Different statuses are mapped to different
planning levels.
Furthermore the cash manager has the option to not only create a
cash request for foreign exchange transactions but also for money
market instruments.
The Cash Trade Requests for Money Market functionality enables
you to create a cash trade request for the new instrument category
Money Market: Fixed Term Deposit/Loan. After you release the cash
trade request, the cash trade request is automatically passed to the
treasury platform integration application.
The process for a money market transactions is started either in the
Cash Flow Analyzer or the Manage Memo Records app with a Cash
Trade Request. From the Cash Trade Request a Money Market
Trade Request is derived which is to be transferred to the trading
platform integration application.
There could be several options for how this (internal) money market
trade request can be processed:
•
•
•
Intercompany trading via manual completion of deal (interest
rate, …)
Back-to-back trading
External trading via phone trade
After all the deal creation in SAP Treasury and Risk Management is
triggered. This step creates the financial transactions in the
Transaction Manager and updates the cash request.
Starting from the Cash Flow Analyzer, the cash manager can create
a cash request as a receiving bank account as a sending bank
account.
There is also the option to create the cash request directly in the
Manage Memo Records app.
In terms of the Money Market transactions the following instruments
are covered:
•
•
•
Deposits and Loans
Fixed Term
Fixed Interest Rate
From the Cash Flow Analyzer, you are directed to the Manage
Memo Records app. The cash request is handled in this app. From
here, you create a cash request for a specific financial instrument,
such as FX spot rate, with a specific traded amount. It is also
possible to assign other information to this cash request, such as
liquidity items, planning levels, certificate documents, and payment
information.
Manage the status of the cash request once it's created. A cash
request can have the following statuses:
•
Created:
You create a new cash request. It can be deleted.
•
•
•
•
Submitted: After you create a cash request, you can submit it
for approval. As a result, your request can be released, or
rejected. A submitted request cannot be edited anymore. If the
request is rejected, you can still edit it and submit it again.
Released: You can only release a request after it’s submitted.
The released request is transmitted to create a trade request.
Fulfilled: A released request is then fulfilled once a trade
request is created.
Canceled: A released request gets canceled if the trade
request is not created.
The cash trade request is equipped with an additional instrument
category called FT (Money Market: Fixed Term Deposit/Loan).
The information from the cash trade request is transformed into a
money market trade request which is moved to the trading platform
integration application. Here the money market transactions are
executed and the incoming information updates the cash trade
request as well as the Transaction Manager.
From the memo record information, the Cash Flow Analyzer and the
liquidity forecast information are updated. The outgoing and
incoming flows with the new planning levels are shown:
C1 - Cash Request Created
• C2 - Submitted Cash Request
• C3 - Released Cash Request
This enables a more accurate cash management.
•
The cash request functionality comes equipped with a four-eye
principle. A second person must release the cash request. With the
release of the cash request, a trade request is created.
This trade request is picked up by the trading platform integration
for further processing.
Trading Platform Integration — Process Steps
With the SAP Cloud Platform application trading platform integration
and the Manage Trade Requests app, you can split the trade
information into several smaller items. On the other hand, you can
group trade requests to have them block traded with the external
trading platform.
If no automatic integration to external trading platforms is needed,
there is also the possibility to handle the trades via phone with an
external partner.
Trade requests are always assigned a status in the Manage Trade
Requests app. This way, you can easily tell what stage a trade
request is at.
When the application receives a trade request, the trade request is
assigned the status In process. Afterwards, it is assigned the
status Initiated. From there, you have several options regarding how
to process the trade request. You can choose one of several
activities, such as Decline or Split. Depending on the activity you
perform, the corresponding status is assigned to the trade request.
If your trade request appears to be stuck in either the status In
process or Sent to trading platform, you can use the Reset activity.
Resetting the trade request assigns the relevant error status
according to the reason for the error.
The trading team that is administering the trading platform
integration can check the request category of the trade request to
understand where the information is originating.
If there is reason to do so, the trading team can also decline the
request. The status of your trade request is set to Declined in the
app, and it is communicated to your back-end system.
In this example, the trade request is executed as phone trade. After
populating the mandatory fields for the value date, counterparty, or
forward rate, the trade can be saved.
Interest Rate Calculation
The nominal amount, interest amount, start date, and end date
returned from the external trading platform are stored in the trading
platform integration, but not forwarded to the back-end system.
Hence, these values are calculated based on the back-end settings.
360T Custom Fields
360T supports custom fields that allow customers to group
transactions more specifically. These custom fields are mapped to
ACCOUNT_ASSIGNMENT fields for trades received by this app.
The Money Market Fixed Term instrument category supports only
these account assignment fields:
•
•
•
•
ACCOUNT_ASSIGNMENT
ACCOUNT_ASSIGNMENT_PORTFOLIO
ACCOUNT_ASSIGNMENT_INTERNAL_REFERENCE
ACCOUNT_ASSIGNMENT_CHARACTERISTICS
SAP S/4HANA Cloud Treasury Management
Finally, the cash manager in the SAP S/4HANA Cloud system gets
the information from the inbound service of the trading platform
integration that the cash request that he started is fulfilled.
Counterparty Management
Overview
You can manage your counterparties centrally in the trading
platform integration application using the Manage Counterparties
app. Counterparties are business partners with the
role Counterparty assigned. This role identifies them as a party that
participates in a financial transaction.
The Counterparty Management functionality provides best-in-class
processes for the following:
•
•
•
Counterparty Maintenance
Deriving preferred Counterparties for transactions
Additional features for phone trades
Note
Once you start editing the IDs of your counterparty entries, this app
acts as your single source of truth for your counterparties.
When setting up your counterparties in this app, you assign your
trading platform and back-end profiles to the relevant counterparty
entries. By doing so, the mapping of the target
fields COUNTERPARTY_ID and PARTNER is set to read-only for
these standing profiles in the apps for mapping configuration, so the
configuration under Configure Mappings is no longer used.
Maintain Counterparties
You have two options for maintaining your counterparties. You can
either replicate the counterparty business partners from your backend system, or create new entries manually in the Manage
Counterparties app.
•
Replicating Counterparties from Your Back-End System
•
Maintaining Counterparties in the Trading Platform
Integration Application
Note
You cannot edit instrument authorizations directly in this app.
Existing authorizations for back-end counterparties (origin type
not Internal) are only displayed. Internally-created counterparties
are authorized for all available instrument categories by default.
If you choose to replicate business partners from your back-end
system, you need to configure the Derivation of Counterparty
Role business rule. This rule defines which business partner role is
used to recognize a business partner as a relevant counterparty for
the trading platform integration application. If a business partner
does not have this role, it is ignored by trading platform integration.
Authorizations are replicated along with the business partners with
the counterparty role. Depending on the authorization detail level of
the assigned authorizations, more mappings can be necessary. If
the business partner only has authorizations for instrument
categories assigned on contract type level or product category level,
no additional mapping is required. If the assigned authorizations are
done on product type and transaction type level, you need to
configure the Derivation of Authorized Instrument
Categories business rule to make sure that the correct
authorizations are derived and stored.
You can edit the ID and Name fields of the replicated
counterparties, but not the replicated authorizations. Therefore, it is
important that you configure the Derivation of Authorized Instrument
Categories business rule carefully to make sure that all
authorizations are replicated properly.
Replicated counterparties cannot be deleted in this app, but
counterparties flagged for deletion in the back-end system are set to
inactive.
Prerequisites
•
•
•
•
You have configured your back-end system.
You have configured your external trading platforms.
You have set up the Derivation of Counterparty Role business
rule.
You have set up the Derivation of Authorized Instrument
Categories business rule.
Procedure
If you want to synchronize your counterparties between your backend system and the trading platform integration application, you
need to set up the data replication of business partners.
For more information on how to set this up, see SAP Note: 2959101.
For manually created counterparties, you can define the
authorizations yourself when creating the new entry by assigning
the relevant profiles.
Open the Manage Counterparties app and create a new entry using
the following parameters:
•
•
•
•
ID: Specify a name for your counterparty. This ID must be
unique throughout the system.
Name: Enter a descriptive name for your counterparty.
Trading Platform Profiles: Set up which trading platform profile
to map with which Counterparty ID (Trading Platform).
Back-End Profiles: Set up which back-end profile to map with
which business partner.
Prerequisites
•
•
You have configured your back-end system.
You have configured your external trading platforms.
Preferred Counterparties
With the Preferred Counterparty functionality, you can only edit your
preferred counterparties for individual trade requests in the Manage
Trade Requests app. Quotes are requested on the trading platform.
Through the configuration of business rules, you can create a
derivation of preferred counterparties. When a trade request is
loaded into the app, these preferred counterparties are assigned in
case the trade request attributes match your rules.
This business rule lets you assign preferred counterparties based on
the following attributes:
•
•
•
•
Company ID
Instrument Category
Currency Pair
Traded Currency
For this rule, you use the counterparties created under Manage
Counterparties. Once the preferred counterparties are assigned to
trade requests, they can also be updated based on the Manage
Preferred Counterparties action under Manage Trade Requests.
To set a preferred counterparty in a trade request, open the Manage
Trade Requests app. Select the trade request from the list for which
you want to manage your preferred counterparties. On the detailed
screen, choose Manage Preferred Counterparties.
In the dialog box, you have the following options:
•
•
Add a new counterparty to the list
Derive your counterparties again in accordance with the
Derivation of Preferred Counterparties business rule set up in
your system. This action will override the existing list of
counterparties.
Prerequisites
•
•
You have set up the Derivation of Preferred
Counterparties business rule.
You have replicated your counterparties from your back-end
system or created them manually in the Manage
Counterparties app.
The trade request must have one of the following statuses:
•
•
•
•
•
•
Initiated
Edited
Mapping Error
Technical Error
Validation Failed
Failed to Send
Phone Trades
When working on phone trades in the trading platform integration,
the counterparty information can be leveraged as a search help in
the Manage Trades app. The system will autocomplete the ID when
working on a new phone trade.
Counterparty Limit Utilization
As a trader, you want to have a clear overview of the free limits of
your counterparties to be able monitor your counterparty risks and
prevent trading beyond the limit for each counterparty. The trading
platform integration application provides the Counterparty Limit
Utilization app to enable you to monitor your counterparty limits and
make better decisions.
There are some prerequisites for the Counterparty Limit Utilization
in both the SAP S/4HANA Cloud back-end system and the Business
Technology Platform app Trading Platform Integration.
Trading Platform Integration
Set the Derivation of Counterparty Limit Types business rule to
derive from your back-end system the limit types that you want to
display in this application.
SAP S/4HANA Cloud Back-End System
Make sure you are using the limit management in your back-end
system. Make the following settings in your back-end system. Set up
your limit types and make special note of the following settings:
Currency of the limit type
• Exchange rate type
Depending on your configuration in the back end, a warning
threshold is displayed in this app. The warning threshold
corresponds to the settings you make under Define Limit Types
•
Check Limit Utilizations in your limit management. You can choose
between not including a warning threshold, creating a percentage
barrier, or creating a warning threshold, which is referred to as an
external limit in the back end.
Note
While you can assign as many dimensions in your back-end system
as you see fit, the display of dimensions is limited in the trading
platform integration. This application supports limit types with up to
three dimensions, namely:
•
•
•
Counterparty
Limit Product Group
Company Code
The Counterparty dimension is mandatory. The other two
dimensions are optional. All other dimensions are displayed in
aggregated form. You can still display them normally in your backend system.
Set the Derivation of Counterparty Limit Types business rule to
derive the limit types that you want to display in this application
from your back-end system. With this business rule, you can set up
which limit types you want to include from your back-end system
when displaying counterparty limits in the Counterparty Limit
Utilization app.
Make the following settings in your back-end system:
Set up your limit types and make special note of the following
settings:
•
Currency of the Limit Type
Enter a currency for the limit type as follows:
If you use an SAP S/4HANA Cloud back-end system, go
to Finance → Treasury and Risk Management → Risk
Management → Define Limit Types.
o If you use an SAP S/4HANA back-end system, go
to Financial Supply Chain Management → Treasury and
Risk Management → Credit Risk Analyzer → Limit
Management → Define Limit Types.
Exchange Rate Type
o
•
Enter an exchange rate type for Settings for Exchange Rate
Type For Limit:
o
o
If you use an SAP S/4HANA Cloud back-end system, go
to Finance → Treasury and Risk Management → Risk
Management → Define and Set Up Evaluation Type.
If you use an SAP S/4HANA back-end system, go
to Financial Supply Chain Management → Treasury and
Risk Management → Credit Risk Analyzer → Limit
Management → Basic Settings for Limit Management.
The Counterparty Limit Utilization app displays only external
counterparties maintained in the Manage Counterparties app. You
recognize these counterparties by their assigned trading usage
category External Trading.
To view the limit utilization, open the Counterparty Limit Utilization
app. By default, the chart view is displayed. You can choose
between different chart types by selecting Selected Chart Type: Bar
Chart. You can also select View By and select the dimension you
want to display your counterparty limits for, such as Company ID or
Counterparty.
The bars in the chart identify the following:
•
Good
The limit utilization is still below the warning threshold for your
internal limit. You can still use this counterparty for trading.
•
Warning
The limit utilization exceeds the warning threshold, but is still
below the internal limit. You can still use this counterparty for
trading, but you should be careful not to exceed the internal
limit.
•
Bad
The limit utilization exceeds the internal limit. You should not
use this counterparty for trading anymore.
•
Warning Threshold
Once this amount is reached, you receive a warning that the
internal limit will be reached soon. If you receive this warning,
you can still use the counterparty for trading, but you should
pay close attention to avoid exceeding the internal limit.
•
Internal Limit
The defined limit configured for a counterparty. It should not
be exceeded to avoid making this counterparty a high-risk
counterparty. Therefore, once this limit is reached, you should
consider using other counterparties for trading.