This article explains what Settlement Types are available to assign to Counterparties in Kooltra and what they mean.
Settlement Types defines how trades entered against a counterparty will be settled in Kooltra. Each account in Kooltra must have a Settlement Type assigned.
The possible Settlement Types that can be assigned to counterparties are defined below:
- Nostro: accounts with this Settlement Type will net settle trades into nostro accounts. This Settlement Type is typically used for Liquidity Providers or Banking counterparties.
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Payments: accounts with this Settlement Type will gross settle trades. This Settlement Type is typically used for client accounts that primarily trade for the purpose of making payments to beneficiaries, and will therefore specify settlement instructions on an individual trade basis. Net settlement is still possible for accounts of this type via trade linking.
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Vostro: accounts with this Settlement Type will net settle trades into vostro accounts. This Settlement Type is typically used for client accounts that trade multiple currencies and net settle them, such as institutional clients and internal trading accounts.
- Give up: accounts with this Settlement Type will settle trades into the nostro of a specified give up account. This give up account must be specified during account creation. This Settlement Type is typically used for Prime Broker accounts.
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No Settlement: accounts with this Settlement Type will not settle trades (i.e. no cash flows will be generated off the back of trading activity). This Settlement Type is typically used for accounts if cash management will be conducted outside of Kooltra.