14.7 Manage Your Unit's Derivatives
Policy Statement
You must continuously monitor all your current derivative agreements and report on them monthly.
Procedure
To manage your unit's derivatives:
Monitor
Monitor the financial position of each agreement, if applicable. Monitor the credit worthiness of all counterparties.
Report
- Create a monthly report for each outstanding derivative agreement. At a minimum, include the following information:
- Description of the derivative instrument or agreement
- Highlights of all material changes to the instrument or agreement since the last report
- Net Termination Exposure (NTE)
- Bond credit rating of all counterparties
- Material factors regarding the counterparty or the derivative that may impact risk to the University
- Summary of collateral held by the University on behalf of each counterparty and collateral held by each counterparty on behalf of the University
- Submit the report to the Office of Enterprise Risk Management as soon as possible after the end of each month.
Derivatives Use Policy
Last Updated: June 27, 2011 | Approved: Senior Associate Vice President for Business and Finance | Effective: November 2010