Spot rate governance

Table of Contents

Summary

Operational rules around the CRM spot rates. A user can hold a rate local to themselves alongside the shared global rate; spot has no independent price verification (IPV) because rates are largely observable; a lighter spot verification checks rates aren't too far from market; and finance approval blesses a spot-rate set once traders have closed forward curves. Different approved spot sets can exist for different purposes, so valuations must pick the right one.

Detail

  • Local vs global: a user may override a rate locally (affects only them) alongside the shared global rate; the UI flags when the global has moved under a local override. Rates can also be shifted by a percentage en masse.
  • No spot IPV: there is no formal independent price-verification process for spot — spot is largely observable (some blending aside) and expected to be close to market.
  • Spot verification: a lighter check that rates are not too far from market (liquidity-driven), focused on the main currencies (G11). In practice a Spot Reconciliation Report compares each system spot against reference sources (Reuters, Bloomberg) with colour-coded tolerances: within tolerance → green; outside → flagged, and Finance either amends the rate or documents a justification. Any amendment must be captured, commented, reviewed, and approved before it feeds official valuations.
  • Finance approval: once Finance is satisfied and forward curves are closed, spot rates are approved. The approved rates override the market-data cut, are used by all downstream systems and reports, and are the base for the IPV cut (which may override rates and vols with independently sourced data, but typically not spot, given observability). Multiple approved sets may exist for different purposes (intraday risk, official EOD, IPV); valuation must select the correct set.

See also

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