Each agreement in Docs has an effective date that determines as of what date the agreement will be effective. In addition to the agreement effective date each clearing and executing account on the agreement also contain an effective date.
The Agreement Effective Date
The agreement effective date can be found in the Dates section of the agreement. It determines the earliest date when accounts and rates on the agreement can be effective and can be set while the agreement is in Composition. If no effective date is set when the agreement is composed the effective date will be set to the agreement Executed date. The agreement executed date corresponds to the date when the last party to the agreement approves it.
NOTE: All other dates on the agreement have to fall on or after the agreement effective date and trades with a trade date before this effective date will NOT price in downstream systems.
Updating or Setting the Agreement Effective Date for Agreements Initiated in Docs
For any agreement initiated in Docs the initiating party can set the effective date on the initiate agreement screen. Once the agreement moves to Composition it can be updated if no approvals have been given on the Rates and Legal workstreams by any party to the agreement.
If the agreement is in the Execution phase it must be moved back to Composition and all approvals on the Rates and Legal workstream must be removed. This can be done in two ways:
- An Execution phase approver can "reject" the agreement, and choose the Legal and Rates workstreams for rejection. This will automatically remove all approvals for these workstreams and the agreement will be placed in Composition.
- A Rates and Legal workstream composer can select the "edit" icon on each of these workstreams, and hit Save & Close or Send for Approval in order to remove the approvals here.
Updating or Setting the Agreement Effective Date for Amendments
When initiating an amendment to an executed agreement, the system validates that no approvals have been granted on any workstreams that have been opened for editing when determining whether or not you are allowed to edit the agreement effective date.
If you edit only the Rates workstream, for example, as long as no approvals have been given on this workstream while the amendment is in Composition, you will be able to edit the agreement effective date. However, if you edit all three workstreams of the agreement the agreement effective date will be editable until one or more of the workstreams have been approved by at least one party to the agreement.
Executing and Clearing Account Effective Dates
The effective dates of the executing and clearing accounts on the agreement must fall on or after the agreement effective date. These effective dates determine only the effective period of the account, not the agreement itself. The executing account effective dates can be found within the Rate Schedule workstream (2) while the clearing account effective dates can be found in the clearing account workstream (3).
Executing Account Effective Date
If executing accounts are associated to the rate schedule, this date determines when each account is effective. There is no requirement in Docs to have individual executing accounts; however, if no specific accounts listed, TBA must be selected.
When adding an executing account to an agreement you can choose not to specify an account effective date. The system will then automatically add the agreement effective date as the effective date for the executing account.
In the event an executing account effective date is specified that falls before the agreement effective date, Docs will automatically update the account effective date to the agreement effective date.
Clearing Account Effective Date
Clearing account effective dates must fall on or after the agreement effective date. At any point in time of the life of an executed agreement, at least one clearing account must be effective.
When a clearing account is added to the agreement you can choose not to specify an account effective date. In the event a clearing account effective date is left blank, Docs will automatically populate the agreement effective date as a the account effective date. In the event a clearing account is given an effective date that falls before the agreement effective date, Docs will automatically update the account effective date to that of the agreement.
NOTE: In downstream systems, trades will only price if BOTH the agreement effective date AND the clearing account effective date fall on or before the trade date.