3. Creating a Fund Product Preference Class

This chapter contains the following sections:

3.1 Fund Preference Class

This section contains the following topics:

3.1.1 What is a Fund Preference Class?

'Preferences' are the options that are available to you for defining the attributes of a fund. A set of such preferences can be grouped together into what we call in Oracle FLEXCUBE, a ‘Preference Class’. You can maintain several fund preference classes.

3.1.2 The Advantage of Defining a Fund Preference Class

While creating a fund product, instead of specifying preferences for each product, you need to just associate the appropriate fund preference class to the product. All the attributes defined for the class will be made applicable to the fund product.

Once defined, a fund preference class can be made applicable to any number of products.

3.2 Fund Preferences Class Details

This section contains the following topics:

3.2.1 Maintaining Fund Preferences Class Details

You can maintain a fund preference class in the ‘Fund Preference Class’ screen. You can invoke the ‘Fund Preference Class’ screen by typing ‘IADPRPCL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button. The ‘Fund Preference Class’ screen will be displayed.

To maintain a new fund preference class, select ‘New’ from the Actions menu in the Application tool bar or click new icon. If you are calling a fund restriction class record that has already been defined, choose the Summary option. From the Summary screen double-click a class of your choice to open it.

3.2.2 Identifying Fund Preference Class

Class Code

In Oracle FLEXCUBE, each fund preference class that you maintain is identified by a unique code called a Class Code. You can follow your own convention for devising this code.

Description

You can specify a short description that will enable you to identify the fund preference class quickly. The short description that you specify is for information purposes only and will not be printed on any customer correspondence.

Fund Type

The funds that you enter in Oracle FLEXCUBE can be internal or external. An internal fund is one that originates from Oracle FLEXCUBE. An external fund is one that has originated from a system outside Oracle FLEXCUBE. e.g. Oracle FLEXCUBE Investor Services.

The fund type that you specify for a class will be defaulted to the product to which it associated.

Pre NAV Fund

The pricing strategy for a fund indicates when and at what price units of the fund should be allocated.

The pricing strategy helps to determine:

Here, since it is a portfolio type product, the system will check the pre-NAV option by default. You will not be allowed to modify this. Thus the NAV of the fund calculated at Beginning of Day (BOD) will be the basis on which the price of a unit of the fund is determined. For funds with pre NAV pricing, subscription and redemption can be done immediately.

Profit

Profit Calculation Required

Check this option in order to calculate the profit for the fund.

Profit Distribution Type

The Profit Distribution Type can be either specified as Variable or Fixed.

Note

Profit Distribution Type is enabled only if Profit Calculation Required is checked.

Refer the topic ‘Automatic Daily EOD Batch’ for details regarding batch processing of profit allocation for account classes.

Charge Accrual

Certain charges that you incur in maintaining a fund need to be accrued. While setting up a fund preference class, you can specify accrual frequency preferences. The charge components of funds associated with the product will be accrued based on these preferences.

Frequency

As a product preference, you can specify the frequency with which the charges applicable to a fund should be accrued. While specifying the details of the charge, you can indicate the period over which the charge should be accrued.

The accrual frequency can be one of the following:

Start Day

In the case of monthly, quarterly, half yearly or yearly accruals, you should specify the date on which the accruals have to be done during the month. For example, if you specify the date as ‘30’, accruals will be carried out on that day of the month, depending on the frequency.

If you want to fix the accrual date for the last working day of the month, you should specify the date as ‘31’ and indicate the frequency. If you indicate the frequency as monthly, the accruals will be done at the end of every month -- that is, on 31st for months with 31 days, on 30th for months with 30 days and on 28th or 29th, as the case may be, for February.

If you specify the frequency as quarterly and fix the accrual date as 31, the accruals will be done on the last day of the month at the end of every quarter. It works in a similar fashion for half-yearly and yearly accrual frequency.

Start Month

If you set the accrual frequency as quarterly, half yearly or yearly, you have to specify the month in which the first accrual has to begin, besides the date on which the accruals should be done.

For example, you have selected the half-yearly option and specified the start month as June and the start date as 31. In this case, Oracle FLEXCUBE will pass the first accrual on 30 June for the period from January 1 to June 30 and the second one on 31 December for the period from 1 July to 31 December.

If the Accrual Date is a Holiday

Oracle FLEXCUBE carries out automatic accruals at the frequency that you specify, as part of the end of cycle processing. However, if the accrual date falls on a holiday, the accruals are done as per your holiday handling specifications in the Branch Parameters screen:

Click the ‘Exit’ button to exit the screen and return to the Application Browser.