Transaction Currency

That currency in which all transactions in a security are conducted is called the transaction currency and it must be specified when defining the security. Each security can have only one transaction currency. This currency should not be changed over the life of the security.

Although a trade in a security can be entered in any currency, it is deemed to be converted into the transaction currency for that security at the appropriate exchange rates. [ This conversion information is included in the trade logs. ]

All valuation calculations on a security are first computed in the specified transaction currency and then converted to the desired valuation currency - if necessary.

What-If Positions and Actual Positions also have a transaction currency associated with them.

This is the currency in which all accounting information for that position is provided.

Whenever a what-if position or an actual position is created, the transaction currency for the position is set to be the same as the transaction currency of that position's security. Once a position is created, it's transaction currency cannot be changed even if the security's transaction currency has been changed.

Impact of Changing a Security's Transaction Currency:

If a portfolio has no actual positions in a security before that security's transaction currency is changed, then any new trade in that security allocated to that portfolio will create a new actual position with the current transaction currency specified for the security. Subsequent trades in that security allocated to that portfolio will then be aggregated into this actual position and the accounting information will be in the current transaction currency of the security.

If there is already an actual position in a portfolio and the transaction currency for that position's security is changed, then all subsequent trades in that security which are assigned to that portfolio will have their accounting information converted into the original actual position's transaction currency. All such conversions are done at the spot mid-market exchange rates as specified in the Default World State.