BBS - Buyback Settlement/Statements
What is
BBS provides the facility to 'settle' Futures deals that are assigned to a TRADE pricing.
There are 2 primary modes of operation; do not settle the House trades and produce a PI/SI accounting document OR action full House Settlement with DA document creation/posting (The settlement process is the same as SETT ). The control is S01 configuration ctrl30_bbpl.
The purpose of BBS is for the Trade counter party to take profit/loss on the futures deals used to price the physicals contract.
e.g. P00001.000 1,000mt pricing L5 Oct12
Sell 20 lots @ 620 Code = AA
Buy 20 lots @ 610 Code = BB
In this situation you can use BBS to give up the P&L to the counter party and unwind the pricing from the trade.
The result of the process will remove the details from the contract pricing, provide a client statement (DOCDES designed) and provide appropriate accounting of the Futures trades selected with an optional facility fee being charged instead of a standard F&O commission.
If the Entity is operating the WIP ledger, the accounting records are between the Counter Party and the WIP account; alternatively the posting are between the Counter Party and the TCCM/S01 nominated Futures P&L/T.S. account.
There is a feature to specify the Counterparty % of the P&L, whereby the remaining % of P&L is posted to the Operating company P&L account (manual entry of account ref in BBS). The facility fee is charged in full to the Counterparty, irrespective of the % assigned.
The process can be actioned in 2 parts, i.e. make the selections of which futures to include, create/dispatch a statement to the Counter Party and store the instruction to be completed when acknowledgement received from the Counter Party. Whilst the futures are in 'limbo' they will be marked-to-market and shown in the VALUATION report in their own section.
The results of BBS are shown in TRADE/FinCalc, GPLREP and VALUATION. The presentation of the BBS result (TRADE/FinCalc) is controlled by ctrl30_bbpl
A memorandum Cost can be created for the TRADE, when ctrl07_bbcomsn is nominated (PHYSCODES/Cost types/right-click). It is marked as no P&L impact and not to be actualised (Cost creation is only relevant when Company is operating PI/SIs)
Tech Note: fut21 is the table for BBS details. fut02_bbref is used to indictae that F&O trade has been subject of BBS process