Reclassification is applicable for Normal and CLP trades. During trade booking, the system checks whether CUSIP exists in the agency module or not. If it does not exist, the trade is marked for reclassification (Reclass Required is marked as Y internally). This validation and marking the trade for re-classification is done only during trade booking.

• If the trade is marked for re-classification, the system uses the trade counterparty for posting the entries for any subsequent events on the trade, until active tranche is available in the agency module for the associated CUSIP.
• Once the tranche is created in the agency module for the associated CUSIP, the balance is re-classed during the EOD batch. The subsequent events always record the borrower of the Agency tranche as related customer while posting the accounting entries.

If the flag SLT Borrower Reclass Required is checked in the Loans Parameter screen and the tranche exists at the time of booking the trade, the system passes accounting entries with tranche borrower as related customer and there is not any reclassification in such cases.