How to Define Position Management Procedures in SAP Treasury and Risk Management

  • by Gaurav Pandey, Sr. Consultant, Application Management Services (AMS), Deloitte Consulting LLP
  • February 3, 2016
Learn how to define and use the position management procedures in SAP Treasury and Risk Management to determine the sequence of steps for generating a derived business transaction.
Learning Objectives

After reading this article, you’ll learn about:

  • How to configure position management procedures in SAP—internal and external
  • How to update type and flow in position management
  • Overriding the position management procedure in SAP based on the business need
Key Concept
SAP Treasury and Risk Management is a series of solutions geared toward analyzing and enhancing business processes in the finance area of a company. In this integrated solution, various components are closely linked. The financial transactions managed in the Transaction Manager can be evaluated and monitored using the analyzer components. In addition to the SAP Treasury and Risk Management analyzer components Market Risk Analyzer, Portfolio Analyzer, and Credit Risk Analyzer, the Transaction Manager is also linked to SAP Cash Management.

At times, financial risks arising from a company’s business activities may affect its value. Treasury organizations manage financial risks and protect values of companies by dealing with important areas, such as:

  • Risk (liquidity and interest rates)
  • Debt (bonds)
  • Investments (money markets)
  • Derivatives (swaps on interest rates)

To deal with these important areas, the treasury organization (especially the back office) needs to determine the market position of the companies. Position management procedures help the back office to make the right decision.

Corporate Actions in the SAP System

Corporate actions are part of position management in the securities area. This is used to determine the changes made by the issuer to the capital. The derivative techniques fall under corporate actions in SAP Treasury and Risk Management. Some examples of corporate actions are:

  • Stock split
  • Capital reduction
  • Stock swap
  • Posting new shares
  • Currency changeover

Before you can implement a corporate action, you need to configure settings in the SAP system for the corporate action. To define the corporate action, you need to choose a corporate action category.

Every time you create a corporate action, the system generates a number that you can either assign as an external number range or, based on the settings, have the system pick up from an internal number range. Figure 1 shows an example of creating a standard stock swap. To complete this step, execute transaction code FWK0 or follow menu path Transaction Manager > Securities > Back Office > Securities Account Management > Corporate Action.

This action displays the Edit Corporate Action: Initial Screen (Figure 1). In this screen, click the CA cat. (corporate action category) field to display the drop-down list of options. Select 02 Stock swap. In the CA type (corporate action type) field, enter 20 for stock swap (std, which stands for standard).

Figure 1
Create a corporate action

Click the Create button to display the next screen (Figure 2).

Figure 2
The Create Corporate Action screen

Populate the fields as shown in Figure 2. Click the save icon  (not shown in Figure 2) to save your entries.

Now consider a scenario in which organization A has acquired organization B. After the merger and acquistion process is complete, the SAP Business Planning and Consolidation (SAP BPC) team has consolidated all the data, and the board has given its approval to swap the stocks for the investors of organization B. Now the SAP Treasury and Risk Management team can configure a standard action like the one shown in Figure 2 to swap 10 stocks of organization B with one stock of organization A.

You must define a date when this action should go into effect and also decide on the corporate action type, such as a standard swap (the system takes care of the transaction automatically) or manual (the transaction is done manually if the volume is low or has to be released in phases).

After you enter the details shown in Figure 2, click the generate icon  to generate the corporate action in the system. To post the corporate action, execute transaction code FWKB or follow menu path Transaction Manager > Securities > Accounting > Corporate Action > Post. This action takes you the screen shown in Figure 3.

Gaurav Pandey

Gaurav Pandey is a senior consultant with the Application Management Services (AMS) division of Deloitte Consulting LLP. He has more than 12 years of experience in implementing and supporting SAP solutions for various global clients. His specialty areas include ABAP, Accounts Payable (FI-AP), Accounts Receivable (FI-AR), and SAP Treasury and Risk Management. He has been instrumental in designing various FSCM solutions along with the payment solutions for the retail industry.

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