Overview
Positions are identified as in scope for Position Limits based on the asset class and the exchange on which they are traded. This article covers the specific asset classes and component instruments that fall within the scope of the Position Limits product.
In-Scope Asset Classes
If both the market and the asset class are in scope, then that position will flow into the Position Limits service. The asset classes currently identified in the PositionLimitAssetClasses Value Set are:
Future
Swap
Option
The above-mentioned value set is available in your FundApps environment by navigating to Monitoring > Shareholding Disclosure > Rules > Value Sets > PositionLimitAssetClasses.
Expansion Beyond Shareholding Disclosure
The Position Limits product expands the scope of existing asset classes for Shareholding Disclosure.
For example, both Options and Futures are in scope for Shareholding Disclosure. However, for Shareholding Disclosure, this is limited to derivatives where the ultimate underlying asset is an Equity or a Bond.
While these Equity and Bond derivatives may also be in scope for Position Limits, the Position Limits service also includes other derivatives in which the reference or underlying asset is a commodity, interest rate, or currency-related product.
Component Instruments
Position Limits clients are required to populate component instruments for derivative contracts in order to achieve the following:
Determine if a contract has to be checked against limits in FIA's Equity Options Position Limit Database (EOPLD).
Calculate the currency exposure of Index Futures on the India Stock Exchange.
Convert a child contract into the correct parent contract.