Money Markets Effectiveness Testing

CNS Treasury’s Money Markets Effectiveness Testing automates hedge performance validation for money market hedges, ensuring IFRS9 compliance. This feature provides real-time insights and documentation, supporting effective risk management.

Money Markets Effectiveness Testing

CNS Treasury’s Money Markets Effectiveness Testing feature ensures that money market hedges are performing as intended and meeting the requirements for hedge accounting compliance under IFRS9. This automated process evaluates the effectiveness of money market hedges, such as short-term interest rate swaps or other derivatives tied to money market positions, to confirm that they are offsetting the risks they were designed to mitigate. By conducting both prospective and retrospective tests, CNS Treasury enables treasury teams to validate hedge performance and make timely adjustments if needed.

Key Features and Benefits

The Effectiveness Testing module for money markets automates calculations, allowing treasury teams to assess the alignment between the hedge and the underlying exposure in real time. CNS Treasury generates effectiveness reports with precise calculations and visual indicators, providing clear insights into hedge performance and any potential ineffectiveness. This functionality simplifies regulatory compliance and strengthens risk management by ensuring that hedging strategies are consistently effective in reducing exposure to interest rate fluctuations and other money market risks.

Integrated Reporting and Compliance

Effectiveness Testing for money market hedges is fully integrated with CNS Treasury’s reporting and accounting systems, supporting financial reporting and compliance. The platform automatically generates necessary documentation and journal entries based on the test results, creating a comprehensive audit trail. This integration ensures that organisations are fully compliant with IFRS9 while maintaining transparency in hedge effectiveness evaluations.

CNS Treasury’s Money Markets Effectiveness Testing feature automates the validation of hedge performance, ensuring regulatory compliance, reducing risk, and enhancing transparency in managing money market exposures.

For assistance or to book a meeting, contact our support team at support@cnstreasury.com.

Thanks,

The CNS Team