Limits on FinverityOS
FinverityOS offers four layers of Limits set up for a single Transaction/Deal:
Product Limit – This is the highest-level limit, set at the level of a specific product structure (e.g. Receivables Finance, Distributor Finance). It caps the total exposure across every programme and deal created under that product. This layer is optional — not every client chooses to use it, but it can serve as an additional safeguard when multiple facilities share the same product.
Programme Limit – This is the global limit assigned to a corporate client (or group of clients). At this stage, the limit is not yet allocated to specific financial products.
Deal Limit – The limit of the specific facility that is being created. This is where we define the structure for the facility, e.g: Receivables Finance without recourse. Multiple Deals can exist within the same programme.
Counterparty Limit – The maximum limit for each counterparty registered under the deal limit, expressed as either a Concentration % or a flat value.
These layered limits work together to manage risk at different levels, from the product as a whole, to the overall programme, down to individual deals and specific counterparties.
1. Product Limit
The product limit is the broadest restriction in the hierarchy, set at the level of an entire product structure rather than any single client. It represents the maximum amount that can be allocated across every programme and deal created under that product, regardless of which corporate client or counterparty is involved. This layer is optional, and is typically used when a bank wants an additional ceiling across all facilities of the same type.
2. Global Limit (Programme Limit)
The global limit is the highest-level restriction set during the creation of an investment programme for a specific client or group. It represents the maximum amount that can be allocated across multiple deals within that programme. This overarching limit ensures that the total exposure of the programme does not exceed a predefined threshold, thereby managing overall risk — and it sits underneath the product limit described above.
3. Deal Limit
A deal limit is a secondary layer under the global (programme) limit, specifying the maximum amount that can be invested in an individual deal. Several deal limits collectively fall under the same global limit. This allows for diversified investments while ensuring that no single deal consumes too large a portion of the overall programme's funds. Deal limits help in managing the risk associated with each individual investment.
4. Counterparty Limit
The counterparty limit is the most granular level of restriction, determining the maximum amount that can be invested in a specific company or entity. This limit ensures that the exposure to any single counterparty remains within acceptable bounds. Multiple counterparty limits exist under each deal limit, providing detailed control over the distribution of investments.