Excess Approval Process
Excesses approve and Auto-close excesses for 6 months. It will be possible to approve a limit breach and have subsequent excesses be automatically closed by the system for a period of time. This avoids the situation where a Portfolio Manager or a Credit Manager must approve a limit breach repeatedly after each revaluation.
At the stage of final approval in the excess approval workflow process, an Excess Automatic Approval is an option that can be selected.
An Excess Automatic Approval will be applied to a given limit. For this limit, an excess will automatically be approved if it is of an equal or lesser amount, relative to the excess that was approved with an Excess Automatic Approval flag.
This will not allow violations above the limit, but below the “Automatic Approval Threshold”. Trading activity that increases risk with respect to the limit will still throw a violation, but trading activity that decreases risk will not throw a violation.
An Excess Automatic Approval will apply for a default period of 6 months. It will also be possible to select 3 months.
There will be a “max 20% threshold”. The option for an Excess Automatic Approval will be greyed out and cannot be selected for a limit excess that is 20% (or greater) above the limit.
References:
ResearchGate floating convertible pdf