Bank earns fees and commissions for trade finance transactions. In Syndication, the syndication commission is paid to the syndication partner unlike in other business sectors like Export L/C where the bank receives commission from the customer.

This is due to the reason that the syndication partner shares a part of the risk and is entitled to a commission. In the application it is defined as SYCX (Syndication commission).

The commission is calculated for each liability separately present in the syndication liabilities overview.

In the Details panel of the Syndication Liabilities, two new buttons to view the Fee conditions are introduced. One for the ‘Primary Fee Condition’ and the other for the ‘Secondary Fee Condition’. As the name suggests, fee conditions for the respective side (Primary or secondary) can be viewed.

The secondary fee conditions can be viewed and modified via transactions Booking Handling, Funding Request, etc. Primary Fee conditions cannot be modified via a Syndication deal.

Dates explanation and defaulting:

• Value Date of Primary Liability: will always display the value date of the last booking of the primary liability that is being syndicated.
• Start Date of Secondary Side: creation date of the secondary liability defaulted from syndication start date.
• Value Date of Secondary Side: value date of current booking for secondary liability always defaulted with current date/today.
• Maturity Date: current expected end date of secondary liability.

The main parameters of the Secondary Fee Condition can be first set up on the Interest details panel. Here, the Default Condition of SYCX will be loaded initially. Any modifications here will be copied to every SYCX created under the SD contract. If needed, each SYCX entry for each Syndication Liability may then be modified individually.

Primary and Secondary Fee Condition Details:

Settle from Date: Creation date of the secondary liability. Same date as the Start Date of secondary side on the secondary liability details panel. Determines earliest possible start date of commission calculation for the selected SYCX Fee Condition.

Settled until Date: Shows the end date of the last settled period for this SYCX Fee condition, if any.

SYCX calculation for a Syndication Liability:

Example: Booking Handling

Every time the amount/balance of a syndication liability is changed the Settlement will default the end date of the to-be settled past period. For this calculation to be triggered it is necessary to change to the settlement panel to trigger the calculation.

Syndication Liability Details Panel: Value date will be defaulted by the current day, can be modified if needed.

The Settled until Date of the selected SYCX will again show the end date of a calculation period, if any. Here, the end date is now set from the actual settlement of the calculation period taken from the Settlement. At the same time, the settled until date becomes the start date of the following calculation period.

Settlement Panel: Here the SYCX commission will be calculated and by default the fees will be set to Disposition ‘X’(settle now).

SYCX Details:

The end date of the current period of the selected SYCX has been defaulted with current date/today and the previous period is now calculated (Settle at the end). The end date of the period may be amended by the user if needed. This will then be copied to and shown as well on the Secondary Fee Condition Details Panel under the Settle until Date as the end date of the last settled period determines the start date of the following period to be settled in the future.

Interest calculation details: