How To Fix RY617 - Hull-White model is not suitable for this transaction

SAP Error Message - Details

• Message type: E = Error

• Message class: RY - Messages for RM Basis

• Message number: 617

• Message text: Hull-White model is not suitable for this transaction

What causes this issue?

In the valuation rule you have chosen the "Hull/White" model as the
valuation model. The Hull-White interest structure model is, however,
only suitable for interest rate instrument options.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

You can either change the valuation rule or assign another valuation
rule to the transaction.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message RY617 - Hull-White model is not suitable for this transaction ?

  The SAP error message RY617, which states "Hull-White model is not suitable for this transaction," typically occurs in the context of financial transactions involving interest rate derivatives or other financial instruments that utilize the Hull-White model for pricing or risk management.
  Cause:
  
  
  Model Applicability: The Hull-White model is a specific interest rate model used for pricing and managing the risk of interest rate derivatives. This error indicates that the transaction you are trying to process is not compatible with the Hull-White model, possibly due to the characteristics of the transaction or the parameters set in the system.
  
  
  Transaction Type: The transaction type may not be supported by the Hull-White model. For example, certain exotic options or non-standard derivatives may not be modeled correctly with this approach.
  
  
  Configuration Issues: There may be configuration settings in the SAP system that are not aligned with the requirements of the Hull-White model, such as missing parameters or incorrect settings in the financial instruments.
  
  
  Market Data: The necessary market data for the Hull-White model may not be available or may be incorrectly configured, leading to the model being deemed unsuitable.
  
  
  Solution:
  
  
  Check Transaction Type: Verify that the transaction you are attempting to process is indeed compatible with the Hull-White model. If it is not, consider using a different model that is suitable for the transaction type.
  
  
  Review Configuration: Check the configuration settings in the SAP system related to the Hull-White model. Ensure that all necessary parameters and settings are correctly defined.
  
  
  Market Data Verification: Ensure that the required market data for the Hull-White model is available and correctly configured in the system. This includes interest rate curves and volatility surfaces.
  
  
  Consult Documentation: Refer to SAP documentation or help resources for specific guidance on the Hull-White model and its applicability to different transaction types.
  
  
  Contact Support: If the issue persists, consider reaching out to SAP support or your internal IT team for further assistance. They may be able to provide insights based on the specific configuration and setup of your SAP environment.
  
  
  Related Information:
  
  Hull-White Model: A popular one-factor interest rate model used in finance for pricing interest rate derivatives. It is based on the assumption that interest rates follow a mean-reverting process.
  Interest Rate Derivatives: Financial instruments whose value is derived from interest rates, including swaps, options, and futures.
  SAP Financial Services: SAP provides various solutions for financial services, including risk management and pricing models for derivatives.
  
  By addressing the above points, you should be able to resolve the RY617 error and proceed with your transaction.