What is collateral management in SAP FS-LMS - Liquidity Management Suite?

SAP Term: collateral management

• Component: FS-LMS

• Component Name: Liquidity Management Suite

• Description: Add-on product of LMS that consolidates positions and transactions in liquid assets from multiple processing silos, providing users with an enterprise view of liquid assets that could be used to provide liquidity.

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• Key Concepts: 
  Collateral management is a process used to manage the risk associated with financial transactions. It involves the exchange of collateral between two parties in order to reduce the risk of default. In the context of SAP’s FS-LMS Liquidity Management Suite, collateral management is used to manage the liquidity of a company’s assets and liabilities. 
  
  How to use it: 
  The FS-LMS Liquidity Management Suite provides a comprehensive set of tools for managing collateral. It allows users to monitor and manage their collateral positions, as well as to track and analyze their liquidity risk. The suite also provides tools for managing collateral agreements, such as setting up margin calls and calculating margin requirements. 
  
  Tips & Tricks: 
  When using the FS-LMS Liquidity Management Suite, it is important to ensure that all collateral agreements are properly documented and that all parties involved are aware of their obligations. Additionally, it is important to regularly monitor and update collateral positions in order to ensure that they remain in compliance with applicable regulations. 
  
  Related Information: 
  For more information on SAP’s FS-LMS Liquidity Management Suite, please visit https://www.sap.com/products/fs-lms-liquidity-management-suite.html. Additionally, for more information on collateral management in general, please visit https://www.investopedia.com/terms/c/collateralmanagement.asp.