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Business and Financial Policies and Procedures

14.7 Manage Your Unit's Derivatives

Policy Statement

You must continuously monitor all your current derivative agreements and report on them monthly.


To manage your unit's derivatives:


Monitor the financial position of each agreement, if applicable. Monitor the credit worthiness of all counterparties.


  1. Create a monthly report for each outstanding derivative agreement. At a minimum, include the following information:
    • Description of the derivative instrument or agreement
    • Highlights of all material changes to the instrument or agreement since the last report
    • Net Termination Exposure (NTE)
    • Bond credit rating of all counterparties
    • Material factors regarding the counterparty or the derivative that may impact risk to the University
    • Summary of collateral held by the University on behalf of each counterparty and collateral held by each counterparty on behalf of the University
  2. Submit the report to the Office of Enterprise Risk Management as soon as possible after the end of each month.

Additional Resources

Derivatives Use Policy

Last Updated: June 27, 2011 | Approved: Senior Associate Vice President for Business and Finance | Effective: November 2010

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