Business Validation Rules Update

All,

There was a business call today and we had a review of the original business validation rules that were agreed.

The business came back with some updates – the rules highlighted in yellow were the ones that were candidates for removal.

Main points from the business group:

1. We should not be comparing original amounts to current amounts in business validation. There can be some swings in the commitment and/or loan levels through the life of a facility and the two sets of amounts are not necessarily comparable (e.g. prime based revolver with a lot of activity upward and well as downward).
BK: Remove the validations from the suggested list.

2. We should add the ‘Number of days’ to the InterestAccrualPeriod since the start/end convention is not always clear. Sometimes they are inclusive and other times they are exclusive (i.e. it seems that there is no standard around it). ‘Number of days’ should be a mandatory field. The suggestion was also made to have a tolerance factor in the case of rounding issues between accrual period amounts and the overall interest payment.
BK: Adding a mandatory field at this stage would make the structure backwardly incompatible.
BK: I think the tolerance factor is a difficult one to model without undermining the message structure. Also, I am not sure whether implementations will take care of this internally (e.g. accruals will get rounded and adjusted to cater for the overall interest payment amount). To be discussed.

3. Interest payment notices sometime contain adjustments from previous periods. Today, these ‘netting’ amounts are included in the latest notice. There should be a way of describing such an adjustment amount.
BK: This could be a candidate for inclusion in a cash flow section where there is a generic adjustment factor applied to any such notice. This way we could leave the actual interest accrual section describing current accruals only and have an adjustment that applies outside of that structure.

Regards,

Bhavik Katira

CEO

TenDelta™

Fresh insight. Pure logic.

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