What is cover funds in SAP FS-CMS - Collateral Management System?

SAP Term: cover funds

• Component: FS-CMS

• Component Name: Collateral Management System

• Description: The cover provided at any time, for the entire amount of the outstanding mortgage bonds and municipal bond, up to the nominal value. This cover is provided by means of mortgages and municipal loans of at least the same amount and having the same interest rate. Real estate credit institutions are required to acquire premium reserve funds in line with § 6 1 of the German Mortgage Bank Act.

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• Key Concepts: 
  Cover funds are a type of financial instrument used in the SAP FS-CMS Collateral Management System. They are used to provide additional security for a loan or other financial transaction. Cover funds are typically held in a separate account and can be used to cover any losses that may occur due to default or other unforeseen circumstances. 
  
  How to use it: 
  Cover funds can be used in the SAP FS-CMS Collateral Management System to provide additional security for a loan or other financial transaction. The cover funds are held in a separate account and can be used to cover any losses that may occur due to default or other unforeseen circumstances. The cover funds can also be used to provide additional liquidity in the event of a default. 
  
  Tips & Tricks: 
  When setting up cover funds, it is important to ensure that the amount of cover funds is sufficient to cover any potential losses that may occur due to default or other unforeseen circumstances. It is also important to ensure that the cover funds are held in a secure account and are not subject to any market fluctuations. 
  
  Related Information: 
  Cover funds are similar to collateral, but they are not the same. Collateral is typically held by the lender and can be used as security for a loan or other financial transaction. Cover funds, on the other hand, are held in a separate account and can be used to cover any losses that may occur due to default or other unforeseen circumstances.