SAP TRM - Introduction to Money Market

The money market is a market in which the cash requirements of market participants who are long cash are met along with the requirements of those that are short cash. This is identical to any financial market; the distinguishing factor of the money market is that it provides for only short-term cash requirements.
The market will always, without fail, be required because the needs of long cash and short cash market participants are never completely synchronized.

The Money Market area is a sub component of the Transaction Manager and is closely integrated with other components.

You can implement cash management decisions in the Money Market area based on the liquidity surplus or deficit determined in Cash Management. The system records the impact transactions have on the liquidity of a company by value date, for each flow in Cash Management. To do this, the data from the Money Market is transferred to Cash Management automatically. This integration simplifies the work processes involved in transaction management from entering potential transactions through to the related accounting activities. The Money Market area comprises functions for period-based accrual/deferral, key date valuation and foreign currency valuation, and for disclosing profits and losses.

It is also closely linked to the Financial Accounting (FI) component since all the data that is relevant for posting in the Money Market area is automatically transferred to FI.

Trading

The trading area contains functions for entering money market transactions. It also enables you to also call up information on transactions or make changes at a later date. Collective processing functions are available to help you manage your transactions efficiently.
The product types in the Money Market area are:


Fixed-Term Deposits

Describes an investment vehicle, usually some kind of debt instrument, that has a fixed time period of investment. With a fixed-term investment, the investor parts with his or her money for a specified period of time and is repaid his or her principal investment only at the end of the investment period.

The trading of fixed-term deposits (including overnight money and eurocurrency) includes transactions with fixed interest rates and an end of term arranged at the start . This includes the transaction types fixed-term deposit investment and fixed-term deposit borrowing. If the authorized business partners and corresponding payment details are already defined in the standing instructions, the required entries are restricted to the required entries in the structural characteristics. In addition to functions for entering and changing fixed-term deposits, the system also supports functions for rollovers and reversals.

Deposits at Notice

A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a savings account or certificate of deposit (CD). The funds in these accounts must be held for a fixed term and include the understanding that the depositor can make a withdrawal only by giving notice.

The trading of fixed-term deposits (including overnight money and eurocurrency) includes transactions with fixed interest rates and an end of term arranged at the start . This includes the transaction types fixed-term deposit investment and fixed-term deposit borrowing. If the authorized business partners and corresponding payment details are already defined in the standing instructions, the required entries are restricted to the required entries in the structural characteristics. In addition to functions for entering and changing fixed-term deposits, the system also supports functions for rollovers and reversals.
You only have to define the standard interest calculation method and the calendar you want to use once, and these will then be used as default values for the transaction.

Commercial Paper

Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. Commercial paper is usually issued at a discount from face value and reflects prevailing market interest rates.

Interest Rate Instrument

An interest rate instrument is a money market transaction with additional structural characteristics, such as variable interest and installment repayment .

CashFlow Transactions

With cash flow-based transactions you can manage transactions whose structural characteristics cannot be mapped by the standard product categories.
You can enter and process transactions by entering their cash flow. A cash flow is a chronological sequence of flows: you enter the term alongside the cash flow that results from the transaction structure. This enables you to map your financial transactions flexibly.

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References:
http://www.investopedia.com/terms/c/commercialpaper.asp#ixzz4vMJ7Q7w0
http://www.investopedia.com/terms/t/timedeposit.asp#ixzz4vMIjom5j
http://www.investopedia.com/terms/f/fixedterm.asp#ixzz4vMIDPzup
https://help.sap.com/saphelp_erp60_sp/helpdata/en/37/dbd7531a4d414de10000000a174cb4/frameset.htm