Portfolio Violations
With respect to credit exposure for Security Financing Transactions (SFT), multiple traders enter deals into one portfolio. It is possible for an SFT deal “cancel and rebook” to cause a limit breach, however the violation that is created will incorrectly be attributed to another deal. Under the standard violation workflow process, this will alert the attention of the wrong trader and delay efforts to resolve the issue.
It is more helpful to the business to assign the violation at the portfolio level and set the violation owner to the portfolio owner, rather than identify the wrong deal and the wrong trader. Violations can be attached to a portfolio. “Exclusive or”. For a given limit, a breach will create exclusively a deal violation or a portfolio violate, but not both.
The owner for a portfolio violation will be set by the portfolio owner, and this portfolio owner can be different than the user (or trader) who entered the deal.
The entry Workflow State for a portfolio violation will be “with Portfolio Manager” rather than “with Trader”. The “Return to Trader” transition will be possible.
CCP/Clearing Member violations for Initial Margining will be assigned to a line-of-business contact. A delegate will be the first owner in the workflow process.
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