Counterparties and accounts

Before a banking instruction is prepared, the team needs to know which counterparty and provider-held account it concerns. The counterparty directory records banks, custodians and settlement parties, together with their organization, active state and eligibility note. The account directory records the provider, external account identifier, currency, active state and counterparty owner. Keeping those links clear gives the reviewer a concrete destination to check.

A counterparty’s active flag is an operating control, not proof of a specific provider transaction. The Credit Officer selects an eligible counterparty for an instruction. The Independent Credit Approver checks that choice against the instruction and its supporting documents. The App Administrator maintains the counterparty directory and resolves ownership or membership errors before they affect a review.

• Counterparty directory. Keep the party’s name, code, contact and eligibility note with its organization.
• Provider account identity. Preserve the provider’s account identifier and currency alongside the account code and owner.
• Instruction connection. Link the selected counterparty to the instruction, then use the account in its debit and credit scope.

Name the person who verifies a new counterparty and the source used to confirm its eligibility. Agree how existing provider account identifiers are imported and how duplicate codes are resolved. An account owner is a counterparty record; it is not the team member who prepares an instruction. Decide who can retire an inactive account and how the team will keep old instruction references readable after retirement.

For a lending business that sends a settlement instruction through a custodian, the custodian can be the counterparty while the provider account is the account used in the movement. Before go-live, walk through that mapping with real records. Check that the account currency is appropriate for the instruction, and confirm which exchange-rate source is used when a cross-currency amount is involved. The read-only effective rate record should be treated as an input to a reviewed decision, not as a provider confirmation.

Create an eligible counterparty for the appropriate organization and connect an active provider account with its external identifier. Prepare a draft instruction owned by a Credit Officer and select that counterparty. Add debit and credit scope that points to the provider account. The reviewer should see the party, account identity, currency and amounts together before approving the instruction.

Now mark the counterparty inactive and test the same case again. The team should resolve the eligibility issue before submitting a new instruction. Existing instruction and provider-event history should remain attributable to the original counterparty and account. If a provider movement arrives later, the settlement team should use the provider event identifier and account reference to locate the right instruction instead of guessing from a matching amount alone.

• Eligible counterparties — The active party directory with eligibility notes and organization context.
• Active provider accounts — Provider-held accounts with owner, currency and external identifier for checking scope.

See instruction preparation for the account selection, then provider outcome for how the same identity follows the external operation.