Fund Reallocations Reporting

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Status: Best Practice Finalised, Last Updated: 26/04/2021

Question:
In agency lending omni programs, is an allocation to a new fund reportable and what is the industry standard. Furthermore, what happens if the credit department of the borrower rejects a fund reallocation post settlement?

Best Practice:
SLB re-allocations are reportable under normal reporting lifecycle practices. If a borrower rejected an allocation for any reasons, e.g. a credit-ceiling breach, then the lender would need to be informed and reallocate to a new fund or recall the position; at this point normal lifecycle practices apply.

Example scenarios and subsequent report:

• Allocation with a new UTI = NEWT.

• Allocation with an existing UTI and the quantity has increased or decreased = MODI.

• Allocation with an existing UTI and the quantity is zero and the term date is open = ETRM.

• Allocation with an existing UTI and the quantity is zero and the return date is less than the fixed term date = ETRM.

• Allocation with an existing UTI and the quantity is zero and the return date is greater than or equal to the fixed term date = do not report. (SFTR-179)