How it Works: Non Hedged Currencies
RESET Matching Process
Using a preset market curve RESET identify and execute offsetting deals between all counterparties to reduce your outstanding fixing risk.
RESET sends a Portfolio entry sheet (Excel-based) to your email address after we have set the interest rate curve. You have until the cut off time stated to fill in the sheet and return it by email to reset@reset.net.
You may enter as many portfolio entry sheets as you require.
There are 2 types of entry sheets: RESET Regular and RESET Freeform.
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RESET Regular
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Every RESET spreadsheet contains a section for you to enter your existing notional positions by tenor, thus indicating your trading interests.
The positions are entered as a plus or minus number. If you need to sell the FRA (receive fixed) to offset your reset risk enter a +ve number.
If you need to buy the FRA (pay fixed) to offset your reset risk enter a -ve number.
Curves
RESET takes great care to provide very accurate mid market consensus curves, incorporating all short end market sentiment and expectations such as Central Bank meeting dates and year-end turns. Numerous benchmark and market significant points on the short term curve are surveyed by RESET from a range of recognised market making banks and straight line interpolation is used to create values for each date.
RESET Freeform
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This is designed to make entry into the system as quick and easy as possible. All you need to do is enter your reset dates and amounts in any order, select your sign convention (the system will remember this for you after your first entry) and return the spreadsheet to us by email.
If you regularly enter the system the same way RESET Freeform will custom design a spreadsheet for you, with all your standard matching criteria and restrictions preset.
For more info, please mail us at specialist@reset.net or ask your relationship manager.
CREDIT LIMITS
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The Credit Limits page of the spreadsheet allows you to define the maximum desired exposure with any individual counterparty in a matching run. You simply enter the maximum gross notional amount of FRAs (or SPS) that you can trade with each counterparty for the purposes of each RESET run. On request, RESET can supply you with the same credit limits preset for the next run. You can then amend any recent changes.
MATCHING OPTIONS
You define the basic way positions are to be matched. These options allow you to offset long fixings and short fixings in equal notional amounts.
Cross Tenor Matching
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By selecting to match across tenors you can reduce the basis risk in your portfolio and increase the chance of reducing your outstanding fixing risk since your 3mth fixings can be offset against your 6mth fixings as well as against each other.
DATE RESTRICTIONS
We give you the option to restrict matching over certain dates such as turns and central bank meeting dates.
The Special Dates Function allows you to further restrict matching over any date of your choosing.
Business Day Window
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It is also possible to select a maximum limit to the number of business days between offsetting trades.
If there is a specific date you do not wish to match over that is not listed, you can enter it in the special dates box.
WARNING: Restrictions by their nature affect the efficiency of the matching process. If you place a lot of restrictions you significantly reduce the amounts tradable.
RESULTS
Following every RESET run you will be sent a report outlining the details of every trade executed on your behalf. Any RESET Hedge trades done to minimise your curve risk are listed separately.
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Results can be sent to you in an electronic format specifically designed to allow automatic upload into your system. We can customise the results format to your specifications. |
We are able to send your trades to you via the Swapswire system, either Double Sided (only with other Swapswire counterparties) or Single Sided (trades for all counterparties). |
It is also possible for you to view and download your results via the password protected MY RESET area on our website www.reset.net. We give you the option to restrict matching over certain dates such as turns and central bank meeting dates. |
© RESET 2006 | Disclaimer of Warranties
