5. Setting up a Fund

5.1 Introduction

A fund that you process in Oracle FLEXCUBE can be internal or external. An internal fund is one that is created and managed entirely in Oracle FLEXCUBE, and an external fund one that has originated from a system external to Oracle FLEXCUBE. The product type identifies the basic nature of a product. In this module, you can create Portfolio funds only.

To recall, you have already created fund products to group together or categorize Funds that share broad similarities. Under each Product that you have defined, you can enter specific funds based on your requirement.

By default a fund inherits all the attributes of the product associated with it. This means that you will not have to define the general attributes of a fund each time you input a fund involving a product.

This chapter contains the following sections:

5.2 Islamic Fund Online Details

This section contains the following topics:

5.2.1 Maintaining Islamic Fund Online Details

You can invoke the ‘Islamic Fund Online’ screen by typing ‘IADFNONL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button. The ‘Islamic Fund On-line’ screen will be displayed.

If you are setting up a new fund, select ‘New’ from the Actions menu in the Application tool bar or click new icon.

The Fund Online screen contains a header, a footer containing fields that are specific to the fund you are creating, and two tabs (Fund details and Bank accounts). Besides these, you will also notice a vertical array of six icons along the lines of which you can enter details of a fund. Fund details are grouped into screens according to the similarities they share.

Product

You should necessarily use a product that has already been created to enter the details of a fund. Depending on the type of fund you are creating, you can select an appropriate product code from the available option list.

A fund will inherit all the attributes defined for the product associated with it. You can further add details that are specific to the fund like the face value of the units of the fund, the fund base currency, the life span of the fund etc and change some of the defaulted attributes.

This feature renders the creation of a fund quick and easy.

Fund Id

Besides the reference number generated by the system, you should enter a unique six to nine character reference number to identify the fund. By default, Oracle FLEXCUBE defaults the product code and the last five characters of the Fund reference number as the Fund ID. You can change the default.

This number, in addition to the 'Fund Reference Number', will be used to identify the fund.

Fund Reference Number

In Oracle FLEXCUBE, reference numbers are generated automatically and sequentially by the system. This number tag is used to identify the fund you are defining. Hence, the system generates a unique number for each fund.

The fund reference number is a combination of a three-digit branch code, a four-character product code, a five-digit Julian Date, and a four-digit serial number. The Julian date has the following format:

‘YYDDD’

Here, YY stands for the last two digits of the year and DDD for the number of day (s) that has/have elapsed in the year.

Every transaction in a fund is tracked against the Fund reference. This reference is also used for MIS tracking.

5.2.2 Fund Details Tab

You can maintain the following details here:

Fund Description

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

Fund Start Date

When you create a fund, you must also specify the life span (start and end date) of the fund. The period that you specify, as the life span of a fund should fall within the life span of the product associated with the fund.

Fund End Date

The end date for a close-ended fund refers to the fund termination date (after which, subscription and redemption is disallowed).

Note

CIF

You would have maintained a unique customer code, or CIF, to identify a customer in the ‘Customer Information Maintenance’ screen. You can associate a CIF with the fund you have chosen, to track the fund.

Indicating the Fund Category

While creating a fund you should indicate to which category the fund belongs. Funds in Oracle FLEXCUBE are categorized into two:

An internal fund is one that is created and managed entirely in Oracle FLEXCUBE, and an external fund one that has originated from a system external to Oracle FLEXCUBE e.g. Oracle FLEXCUBE Investor Services.

Base Currency

The base currency is the currency in which the Fund should be denominated. You can select a currency code from the the available option list.. The NAV and dividend declarations for the Fund will be expressed and calculated in this currency.

Subscriptions can be made to the fund in a currency that is different from the base currency; but entitlement and benefits will be calculated in the fund base currency. The standard exchange rate defined for the currency pair is used for the conversion.

Face Value

For the mutual funds that you set up, you should indicate the face value of each unit of the fund.

Fund Role to Head Class

To recall, while defining a product you have already indicated the accounting roles and heads that are applicable to the product. These become applicable to all funds to which the product is associated.

While processing a fund, you have the option to change the Role to Head mapping class defaulted from the product. The accounting entries that are passed for the fund will be posted to accounts based on the Accounting Role to Head class that you associate with it.

5.2.2.1 Portfolio Fund Subscription

During subscription online, the system checks to verify that the value date of the investment is not earlier than the last profit distribution date.

Fund Buy Load

The fund buy load indicates the percentage of the NAV that should be added to the NAV of a unit of the fund to calculate the price at which the unit can be subscribed.

The buy load is used to calculate the price at which a unit of the fund should be sold. It is expressed as a percentage of the NAV.

Subscription price = NAV + Buy Load

Fund Sell Load

The fund sell load indicates the percentage of the NAV that should be subtracted from the NAV of a unit of the fund to calculate the price at which the unit can be subscribed.

The sell load is used to calculate the price at which a unit of the fund should be redeemed. It is expressed as a percentage of the NAV.

Redemption price = NAV - Sell Load

Profit Details

You can maintain the following details here:

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.

Frequency

Specify the frequency of the profit calculation from the drop down list.

Start Day

Specify the day on which the profit calculation should begin.

Start Month

Specify the month from which the profit calculation should begin.

Last Calculation Date

Displays the date on which the last profit calculation was performed. This date is picked from the daily End of Day (EOD) batch.

Next Calculation Date

The next profit calculation date derived based on the specified frequency is displayed here.

Note

5.2.3 Automatic Daily EOD Batch

If the fund profit distribution date is due on a particular day, the EOD batch checks if the profit allocation is performed for all the account classes of the fund. In case profit allocation has not occurred for all the account classes, the EOD batch displays an error message.

Further, this batch updates the last profit calculation date and next profit calculation date in the fund. The PLOC event in the fund for all the account classes linked to the fund is triggered by this batch.

Also, this EOD batch moves all the profit allocation records of the fund to the history data store.

5.2.3.1 Indicating the Fund Pricing Strategy

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

The pricing strategy helps to determine:

If you choose the pre-NAV option, 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.

If you select the Oracle FLEXCUBE funding strategy, the NAV calculated at End of Day (EOD) would be used to determine the price of a unit of the fund. As the price of a unit of the fund is determined using the NAV calculated during EOD; any allocation or redemption of units from the fund can be done only after the EOD is run.

Islamic Fund

If you check this box, then the created fund id will be used for the investment by the depositors and other stakeholder’s contribution. This option is selected only in the non fund branch.

System will do the following validation if the Islamic fund option is checked:

Note

If there are any active GLs/Account classes linked to this fund id then the closure of the fund is not possible.

5.2.4 Bank Account Tab

Click the Bank Account tab from the ‘Islamic Fund On-line’ screen to indicate the asset settlement accounts that should be used in the accounting entries that are passed for the fund.

Note

This tab will not be available for Portfolio Funds if you have selected the option ‘Allow Cor­porate Access’ for the fund branch in the ‘Branch Parameters’ screen.

Here, you can capture the following details:

Bank Account

A fund that you create can have bank accounts in different currencies. However it is mandatory for you to indicate an asset account in the base currency of the fund. These accounts will be used when investments are made into the fund in a currency other than the fund base currency.

Note

You can maintain only one bank account for a specific currency.

For external funds

For external funds, you can specify the related account number. This is the number by which the fund is identified in the external system.

5.2.5 Indicating Fund Restrictions

Funds can be open funds or restricted funds. You can specify that a fund is a restricted fund, by selecting the option ‘Restricted Fund’. If you select this option, the ‘Fund Restrictions’ button in the screen will be enabled. You can maintain the various restrictions in the Fund Restrictions screen which is invoked when you click on this button.

Specify the type of restriction being placed on the account and the value applicable for the restriction.

For example, if some funds are not to be opened for investment in specific countries, restrictions can be made on the fund for that country, identifying that the fund cannot be sold in that country.

There will no processing based on the restrictions captured for a fund.

Default Mudarabah Fund

Check this box to indicate whether the fund is the Default Mudarabah Fund. You cannot modify this option after the fund is authorized.

Note

You can mark only one fund Id as default fund.

Corpus Amount

Specify the total amount that can be invested in the fund.

Click the ‘Profit Share Details’ button to invoke ‘Islamic Asset Management – Profit Share Details’ screen. You can view the details of the participants and their respective contribution in this screen.

5.2.6 Levying Transaction Charges

To maintain a fund, your bank may incur several expenses. You can levy the expenses that you incur as charges on a customer. The charges that you collect can be applicable for the following events:

From the Fund On-line screen, click the ‘Charge’ button. The ‘Charge Detail’ screen will be displayed.

The characteristic feature of a charge is that it is always booked in advance and is not accrued, as a charge is collected only when it is due. Each time you create a fund, you need not specify when and how the charges should be collected.

To recall, you have defined the attributes of a charge by defining a ‘Rule’. A rule identifies the basic nature of the charge. You have further defined a Charge class where you have enriched the attributes of a rule. We shall refer to these classes as 'components'. Each charge component in turn is linked to a fund product. All the charge components linked to a product are defaulted to the funds associated with it. Thus each time you create a fund, you need not specify when and how charges should be collected.

However, while creating a fund, you can choose to associate a charge component with it. Further, you can modify some of the attributes defined for the applicable component.

5.2.6.1 Association Tab

All the charge components applicable to the fund will be displayed together with the rule that is linked to the component.

In this section of the screen you can:

Changing the Charge Rule linked to a Component

The rule that is linked to a charge component is displayed next to the component. To link a new rule to the component, click option list from the field titled 'Rule'. A list of all the charge rules maintained will be displayed. Select the appropriate rule from the picklist. The new rule will be made applicable to the charge component.

Disassociating a Charge Component from a Fund

You can disassociate a charge component from the fund. In the 'Association' tab section of the ‘Contract Charge Details’ screen, click against the waive option positioned next to the component.

In this case, the charge component is attached to the fund but is not calculated.

5.2.6.2 Application Tab

In the application section of the screen, you can indicate the charge components that should be applied to the fund. The list of components that is displayed depends on the charge components that you have associated to the fund. The following details of the component are also displayed:

You can change the charge amount that is calculated using the class applicable to the component.

Waiver

You also have the option to waive a component for a fund. To waive a charge for a fund, check against the 'waiver' option in the application section of the screen. The charge will be calculated but not applied.

Note

You can waive a charge only if it is yet to be liquidated.

5.2.6.3 Liquidation Tab

When a charge component that is applied to a fund is liquidated, the relevant accounting entries are passed. The Contract ‘Charge Details’ screen displays:

5.2.7 Levying Tax on a Fund

The tax details specified for the product to which the fund is associated is automatically applied. However, while processing a fund, you can waive the application of tax on the fund.

You can invoke the ‘Tax Details’ screen by clicking the ‘Tax’ button in the ‘Islamic Fund On-line’ screen.

5.2.7.1 Features of the Tax Details Screen

The reference number of the fund for which you are defining transaction tax details is displayed. The screen will contain a list of all the tax components applicable to the fund.

Associating a Tax Component to a Fund

All the tax components applicable to the fund you are processing will be displayed together with the rule linked to the component.

In this section of the screen you can:

Changing the Tax Rule Linked to a Component

The rule that is linked to a tax component is displayed next to the component. To link a new rule to the component, click option list from the field titled 'Rule'. Select the appropriate rule from the picklist that is displayed. The new rule will be made applicable to the component.

Disassociating a Tax Component from a Fund

You can disassociate a tax component from the fund. In the 'Association' section of the Contract Tax screen, click against the waive option positioned next to the component.

In this case, the tax component is attached to the fund but is not calculated.

Indicating the Tax Components to be applied to a Fund

In the application section of the screen, you can indicate the tax components that should be applied to the fund. The list of components that is displayed depends on the tax components that you have associated with the fund. The following details of the component are also displayed:

You can change the tax amount that is calculated using the rule applicable to the component.

Waiving Tax on a Fund

You also have the option to waive a tax component for a fund. To waive a tax component for a fund, check against the 'waiver' option in the application section of the screen. The tax will be calculated but not applied.

Note

You can waive tax only if it is yet to be liquidated.

Tax Liquidation

When a tax component that is applied to a fund is liquidated, the relevant accounting entries are passed. The contract tax screen displays:

5.2.8 Specifying Settlement Instructions

Through the settlement screens you can view the fund accounts to which entries for the applicable charges and taxes are posted. These details are available in the ‘Settlement Details’ screen. Click the ‘Settlement’ button in the ‘Islamic Fund On-line’ screen to invoke the ‘Settlement Details’ screen.

Besides the settlement components, the other available details include the:

All the settlement components applicable to the fund are expressed in the fund base currency. To recall, you have already indicated a settlement account in the fund base currency in the Bank Accounts screen. This account will be used as the settlement account for the displayed components.

Depending on the component, Oracle FLEXCUBE indicates whether the account involved in an entry has to be debited or credited:

5.2.9 Defining MIS Details for a Fund

The MIS details you would define for a fund and a product are similar. The entities defined for the customer will be picked up by default and they can be changed. Click the ‘MIS’ button in the ‘Islamic Fund On-line’ screen to invoke the ‘Transaction MIS Maintenance’ screen.

For a fund, the transaction type of MIS class, the cost code and pool code will be picked up from the product under which the fund is processed. The composite MIS code is defaulted from the definition made for the customer involved in a transaction involving the fund.

The Fund MIS code is defaulted from the product involved in the fund. The first fund MIS code is reserved for the Fund ID and cannot be changed. This facilitates the breaking up of balances for NAV computation.

The profit calculation method for the refinancing rates of the pool will also be picked up by default from Pool Codes maintenance and can be changed.

For an account, the transaction type of MIS class will be picked up from the account class, along with the cost codes and pool codes. The composite type of MIS class will be defaulted from those defined for the customer. These can be changed.

The profit calculation method for the refinancing rates of the pool will also be picked up by default from Pool Codes maintenance and can be changed.

5.2.10 Charges on NAV

For a specific fund, you can override charges that have been specified for the fund through the charge rule associated with the fund. You can specify special rates for a charge rule; alternatively, you can waive the charges altogether.

You can define specific rates for charges applicable on NAV, for a specific fund. You can also make a specific charge rule applicable on NAV, for a specific fund.

Click the ‘Rate’ button in the ‘Islamic Fund Online’ screen to apply specific charge rules with specific rates for NAV charges. The ‘Rate Details’ screen will be displayed.

In this screen, you can specify the following:

5.2.11 Associating Various Account Classes to a Customer

You may wish to associate an account classes to a specific customer. Oracle FLEXCUBE allows such an association of account class to a customer.

5.2.11.1 Linking Tenor to Account Class

Each investment that you make into a fund is tracked as a unique deposit account. This deposit account will be considered when you enter a subscription transaction for a portfolio fund. When you enter a subscription transaction, if you do not specify the deposit account, the system will create one when you authorize the transaction. The system will default the account class that the deposit account belongs to, and the maturity date of the investment, based on the tenor that you have specified for the transaction.

You can link a tenor and an account class in the ‘Account Class’ screen. Initially, you need to maintain a new limit type ‘ACCOUNT_TENOR’ with its applicable values as shown in the screen. You can invoke the ‘Limits Type Maintenance’ screen by typing ‘LMDTYPES’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Once you have maintained all values, click the ‘Ok’ button to save.

Now, to invoke the ‘Account Class’ screen, click the ‘Account Class’ button.

Note

This button will be enabled only for Portfolio funds.

The system defaults the fund ID and the fund description from the ‘Fund On-Line’ screen. However, you cannot modify them.

In this screen, specify the following:

Parent Account Class

Specify the account class to be used while creating the parent deposit account linked to the deposit account.

Note

If you do not specify a parent account class, the system will display a configurable over­ride.

Contra Deposit Account Class

Specify the account class to be used while creating the contra deposit account. If you do not specify a contra account class, the system will display a configurable override.

Note

For example, you have selected the child account classes A1, A2 and A3 for tenors T1, T2 and T3 respectively for a fund F1, you will be allowed to select the three account classes for the same tenors for another fund, say F2. Under the fund F2, child account class A1 could be linked to tenor T2, A2 to T1 and A3 to T3.

In the Deposit Account Classes section, specify the following:

Tenor

Specify the tenor of the investment. The option list includes all tenors you would have maintained.

Account Class

Specify the account class to be linked to the tenor. This account class will be used to create the child deposit account.

Note

Once an authorized transaction (a subscription, redemption, dividend payout etc.) is car­ried out using any of the information you have maintained in this screen occurs, you will not be allowed to modify the information you have entered in this screen.

5.3 Maintaining Profit Share Details

You can capture the profit share details of the fund using ‘Islamic Asset Management – Profit Share Details’ screen. You can invoke the Islamic Asset Management – Profit Share Details’ screen by typing ‘IADPRSDL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you can capture the following details:

Fund ID

Capture the identification of the Fund.

Fund Description

The description of the fund is displayed in this field.

Corpus Amount

The corpus amount of the Fund Id is displayed in this field.

Profit Share Details

You can specify the following details here:

Party

Capture the participant whose contribution details you want to view.

Branch

The current branch of the customer is displayed.

Account

Capture the customer account belonging to the customer.

Amount

Capture the amount in fund base currency.

Currency

The fund currency is displayed in this field.

Depositor Account

The deposit account linked to the fund ID is displayed in this field.

Profit Share

Specify the profit share in terms of percentage of share required for each of the participant.

Loss Share

The system calculates the loss share according to the investment ratio and displays it.

The system does the following validations:

5.4 Maintaining Islamic Asset Profit Share Sale

You can capture the sale details of the fund using ‘Islamic Asset Management – Profit Share Sale Details’ screen. You can invoke the ‘Islamic Asset Management – Profit Share Sale Details’ screen by typing ‘IADSLEDL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you can enter the following details:

Fund Id

Capture the identification of the Fund.

Corpus Amount

The corpus amount of the Fund Id is displayed in this field.

Fund Description

The description of the fund is displayed in this field.

Sale Sequence Number

The system displays the sequence number of the sale on incremental basis.

Redeem All

Check this option to redeem full amount for all participants or leave it unchecked to redeem specific participant’s share.

Note

You can do specific party redemption by giving the input of redemption amount.

Sale Details

Party

The participant of the fund is displayed.

Branch

The current branch of the customer is displayed.

Deposit Account

The deposit account linked to the fund ID is displayed in this field.

Amount

The existing share of amount in fund base currency is displayed.

Redemption Amount

Specify the redemption amount for the party.

Currency

The fund base currency is displayed.

Profit Share

The profit share in terms of percentage of share required for each of the participant is displayed. You can also change this Profit Share.

Loss Share

The system calculates the loss share according to the investment ratio and displays it.

5.5 Maintaining Islamic Asset Profit Share Transfer

Contributors can transfer their investments among themselves. You can capture the transfer of share details using ‘Islamic Asset Management – Profit Share Transfer Details’ screen. You can also view the charge schedule definition of the parties involved in transfer using ‘Profit Share Transfer’ details screen. You can invoke the ‘Islamic Asset Management – Profit Share Transfer Details’ screen by typing ‘IADTRFDL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Note

The transfer can be interchanging the amount or new party addition.

Here, you can capture the following details:

Fund Id

Capture the identification of the Fund.

Corpus Amount

The corpus amount of the Fund Id is displayed in this field.

Fund Description

The description of the fund is displayed in this field.

Transfer Sequence Number

The system displays the sequence number of the transfer on incremental basis.

From Transfer Details

Party

Capture the party from which the details are transferred.

Branch

The current branch of the customer is displayed.

Deposit Account

The system displays the deposit account belonging to the customer.

Amount

The system computes the amount for ‘From party’ from the syndication fund amount to the extent of current contribution share percentage of the ‘From party’.

Transfer Amount

Specify the amount you need to transfer from the contribution share percentage. The current invested amount of the ‘From Party’ will be transferred to the same extent.

The actual transfer amount is calculated based on the following formula:

Actual transfer amount = (sum of invested amount * (transfer amount/syndication amount * 100))/100

Profit Share

The existing profit share percent is displayed.

Currency

The fund base currency is displayed.

Transfer Amount

Specify the transfer amount in this field.

Note

The system validates whether the transfer amount is lesser than the current share of the ‘from party’.

To Transfer Details

Party

Capture the Party to whom the share is to be transferred.

Branch

The current branch of the customer is displayed.

Deposit Account

The existing account for the customer is displayed in this field. If the customer is a new addition, the system creates a new deposit account and displays it.

Account

Capture the account of the customer from the option list.

Note

The account you capture here can be either a new account or an existing account of the customer.

Transfer Share

Specify the transfer share percent between the parties.

Loss Share

The system calculates the loss share according to the investment ratio and displays it.

The system does the following validations:

Click ‘Populate Charge’ button. The system displays the following charge definition details pertaining to the parties involved in transfer; however, you can modify the same, if needed.

Contributors can transfer investments,

In both the cases the profit share will reflect the revised share %.

Note

You can modify ‘Rate’ and ‘Flat amount’ for recalculating the amount due for future charge schedules.

When the transfer is to a new party, then you need to add the charge definition parameters and the system derives the corresponding schedule details.

Charge schedule is recalculated based on the value date of the transfer for the parties involved in transfer, excluding bank.

5.6 Calculating Profit Share

If the ‘Profit Calculation’ is maintained as ‘Manual’ while creating the syndication fund, then you can calculate, distribute and allocate the profit to the contributors. You can calculate the profit amount for fund using ‘Islamic Asset Management – Profit Share Calculation’ screen. You can invoke the ‘Islamic Asset Management – Profit Share Calculation’ screen by typing ‘IADPRCAL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you can capture the following details:

Branch

The current branch of the customer is displayed.

Financial Year

Capture the financial year for which the profit share needs to be calculated.

From Period

Specify the period from which the profit share needs to be calculated.

To Period

Specify the period to which the profit share needs to be calculated.

Fund Id

Capture the fund id for which the profit share needs to be calculated.

Fund Currency

The currency of the fund is displayed.

Profit Amount

The system calculates profit amount based on income and expense for the fund and displays it.

Click the ‘Calculate’ buttonto calculate the profit amount for the fund.

Click the ‘Distribute’ button to distribute the profit amount based on profit share.

Click the ‘Allocate’ button to allocate the actual profit amount for all parties based on profit share.

The system does the following validations after the projected profit amount allocation:

Parties Total Profit Share

You can specify the following details here:

Party

The participant of the fund is displayed.

Profit Share

The profit share of the participant in the fund is displayed.

Actual Profit Amount

The actual profit amount of the party is displayed.

Projected Profit Amount

The projected profit amount of the party is displayed.

Fund Currency

The currency of the fund is displayed.

Profit Share Breakup Details

The system calculates and computes the profit share breakup details for the party selected in the ‘Parties Total Profit Share’ section. It is an indicator for the period based profit amount. The following values are displayed here:

5.6.1 Viewing Transfer History Details

You can query and view the transfer details for the profit calculated period in ‘Transfer History’ screen. Click ‘Transfer History’ button in ‘Profit Share Calculation’ screen to view this screen.

You can view the following details for the selected party from the ‘Profit Share Calculation’ screen:

5.7 Viewing Profit Share History for Parties

Oracle FLEXCUBE enables you to query for viewing the profit history of the parties involved in syndication fund, using the ‘Islamic Syndication Profit Share History’. You can invoke the ‘Islamic Syndication Profit Share History’ screen by typing ‘IADPRHIS’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

You can specify all are any of the following parameters and query for profit share history:

Branch Code

Specify a valid branch code based on which you need to query for the profit share history. The adjoining option list displays all valid branch codes. You can select the appropriate one.

Fund ID

Specify a valid fund ID based on which you need to query for the profit share history. The adjoining option list displays all fund IDs maintained for Islamic Accounts. You can select the appropriate one.

Party

Specify party name based on which you need to query for the profit share history. The adjoining option list displays all parties associated with the syndication fund. You can select the appropriate one.

Financial Year

Specify financial year based on which you need to query for the profit share history. The adjoining option list displays all valid branch codes. You can select the appropriate one.

From Period

Specify the start period of the syndication fund based on which you need to query for the profit share history. The adjoining option list displays all time periods applicable to syndication fund. You can select the appropriate one.

To Period

Specify an end period of the syndication fund based on which you need to query for the profit share history. The adjoining option list displays all time periods applicable to syndication fund. You can select the appropriate one.

Click ‘Query’ button. The system retrieves and displays the following profit share history details based criteria specified:

5.8 Allocating Projected Profit

You can capture the projected profit amount for the current period and distribute it among the participants of the fund ID using ‘Islamic Asset Management – Projected Profit Allocation’ screen.

You can invoke the ‘Islamic Asset Management – Projected Profit Allocation’ screen by typing ‘IADPROJP’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

You can specify the following details here:

Branch

The current branch of the customer is displayed.

Fund Id

Capture the fund id for which the projected profit amount needs to be allocated among parties.

Fund Currency

The currency of the fund is displayed.

Corpus Amount

The corpus amount of the Fund Id is displayed in this field.

Financial Year

Capture the financial year for which the projected profit needs to be allocated.

From Period

Specify the period from which the projected profit needs to be allocated.

To Period

Specify the period to which the projected profit needs to be allocated.

Projected Amount

Specify the projected amount for fund.

Click the Distribute’ button to distribute the profit amount based on projected profit.

Click the ‘Allocate’ button to allocate actual projected profit amount for all parties based on profit share.

Profit Share Details

You can capture the following details:

Party

The participant of the fund is displayed.

Profit Share

The profit share of the participant in the fund is displayed.

Projected Profit Amount

The projected profit amount of the participant in the fund is displayed.

Fund Currency

The currency of the fund is displayed.

5.9 Indicating GLs for NAV Calculations

This section contains the following topics:

In Oracle FLEXCUBE, the NAV of a fund is computed using the following formula:

The total assets and liabilities are computed based on the GL + MIS balances for the fund. For the purpose of NAV calculation, you can indicate the GLs that should be considered for NAV calculation. You can indicate these GLs by maintaining either a list of GLs that should be included or excluded for NAV calculations.

You can define several NAV calculation methods for a Fund. Each NAV for the fund can be defined with a set of GLs to be included or excluded and NAV calculation frequency preferences. Click the ‘Net Asset Value’ button in the ‘Fund Online’ screen to invoke the ‘Net Asset Value Details’ screen.

5.9.1 Identifying a GL Combination for NAV Calculation

The NAV of a fund is calculated using the balances of a combination of GLs that you define. You can define several sets of GL combinations for the purpose of NAV calculation. Each such GL combination should be assigned a unique identification ID.

Indicating the Main NAV ID for a Fund

If you have defined several GL combinations for calculating the NAV of a fund, you can assign one of the combinations as the Main NAV.

For external funds, the GL combination marked as the Main NAV is handed off to Oracle FLEXCUBE IS.

Selected General Ledger

You can specify the GLs to be included for calculating the NAV of a fund either in the form of an ‘included’ or ‘excluded’ list. You can indicate your preference by choosing the appropriate option under the field 'Selected GLs'.

The entire list of GLs maintained at your bank is displayed under the head GLs available. If you have maintained an included list, the GLs displayed in the selected column only will be considered for NAV calculation. If you selected the 'excluded' option, all GLs other than the ones in the excluded list will be considered for NAV calculation.

Moving a GL to the Included/Excluded List

You will notice two columns displayed in this screen:

For example, if you have chosen to maintain an included list, the column will display the list of GLs that should be used for NAV calculation.

In the Available column, all the GLs that you have maintained are displayed. You can move a GL to the included/excluded column by using the buttons provided for the same. Click forward arrow button to move an item from the available to the included/excluded list. Click back arrow button to move an item back to the available column.

Net Asset Value Frequency

Frequency

You can indicate the frequency, with which the Net Asset Value of a fund should be calculated. The frequency that you specify can be:

Oracle FLEXCUBE will automatically calculate the NAV of a fund, as part of the end of cycle processing based on the preferences that you specified here.

Start Day

In the case of monthly, quarterly, half yearly or yearly frequencies, you should specify the date on which the NAV should be calculated during the month. For example, if you specify the date as ‘30’, NAV will be calculated on that day of the month, depending on the frequency.

If you want to fix the NAV calculation 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 NAV of the fund will be calculated 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 calculation date as 31, the NAV will be calculated on the last day of the month at the end of every quarter. It works in a similar fashion for half-yearly and yearly calculation frequency.

Start Month

If you set the calculation frequency as quarterly, half yearly or yearly, you have to specify the month in which the NAV calculation for the fund should be done, besides the date on which the calculation should be done.

If the Calculation Date Falls on a Holiday

If the NAV calculation date falls on a holiday, the calculation is done as per your holiday handling specifications in the Branch Parameters screen.

The System provides two Basis Amount tags for NAV Charge calculation:

For Daily NAV funds in respect of which the NAV charges (NAVC) are charged using the Basis Amount tag NAV-ANNULZ-AMT, NAV charges are computed for all days in a year, including both business days as well as intervening holidays.

The charges in respect of a Daily NAV fund using the NAV-ANNULZD-AMT Basis Amount tag are computed as follows:

5.9.2 NAV Calculation Updates

The following NAV details are available and displayed for each fund (internal and external):

Moving between the NAV Combinations Defined for a Fund

To move between the NAV combinations defined for a fund, use the buttons provided for the same at the bottom of the screen:

Confirming your specifications

After you have defined the GLs for NAV calculation, click the ‘OK’ button to confirm your specifications. Click the ‘Exit’ button to delete your specifications. In either case you will be returned to the ‘Fund Online’ screen.

5.10 Maintaining GL for Profit Calculation

In order to map the income and expenses GL to the fund for profit calculation, invoke the ‘Islamic Profit Calculation GL Maintenance’ screen. You can invoke the ‘Islamic Profit Calculation GL Maintenance’ screen by typing ‘IADGLMNT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you can capture the following details:

GL Code

Select the GL to be included for the profit calculation of the fund from the option list. All open income, Islamic fund liability GL’s and expense leaf GL’s are displayed in the option list.

Fund Identifier

Select the fund to which the GL is mapped from the option list. All valid funds for the branch and all fund IDs that are active and authorized are displayed in the option list. You can select all funds by selecting ‘ALL’ from the option list.

You can link two PEA GLs and two IRR GLs to the same function ID.

Islamic Fund

The system checks this box automatically, if the fund selected is an Islamic Fund.

GL Type

Indicate the type of GL by choosing one of the following options:

You can choose ‘PEA GL’ only if the following are satisfied:

GL Transaction Code

If you have indicated the GL type as ‘PEA GL’ or ‘IRR GL’, you will have to specify the transaction code using which accounting entries should be passed for the PEA and IRR. The adjoining option list displays all valid transaction codes maintained in the system. You can select the appropriate one.

Profit Contribution Balance Basis

You can specify the balance basis for the Share holder and PEA (Liability GL) should be considered for Islamic profit sharing. You can choose the appropriate option from the following values available in the drop-down list:

If the Profit Contribution Balance Basis is not selected then the Islamic Fund Share Holder balance basis mentioned in the bank level will be taken into consideration and balance is calculated accordingly.

GL balance calculation will be based on the book dated balance.

The PEA GL is not a mandatory to be maintained. Also there can only one PEA GL for a fund Id.

5.11 Calculating Profit

Computation of profit earned by the fund is performed by the Profit Calculation Batch. You can invoke the ‘Profit Calculation Batch’ screen by typing ‘IADPFCAL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

When a fund is selected from the option list the system checks if the profit calculation date is due on that particular day. If not an error message is displayed.

The Profit Calculation batch performs the following operations:

This batch can also be performed for fund branches as an intra day process.

The system calculates the profit made by the fund based on the list of GL’s linked to the fund for profit calculation. Also, the system picks the list of GL’s maintained for the fund id ‘ALL’.

Further, the system fetches the GL MIS balances for the GL’s linked to the fund. The MIS class with Fund id is considered for fetching the balances for GL.

Profit = Total income – Total expense

The system internally stores the profit calculated and the profit calculation date.

The Profit Calculation batch fetches all the deposit account classes linked to the fund. For each account class the weighted average balance is computed from the last profit distribution date till the current date. The weighted average balance of the account class is the sum of weighted average balances of all the accounts within the account class.

As part of the End of Day (EOD) batch the system computes the weighted average balances of all deposit accounts linked to a fund id. This again is stored internally in the system.

When the profit allocation is performed for an account class during the day the system arrives at the balance for the day based on the transactions posted.

If a deposit account is opened on a particular day and profit distribution date is the same as that day, then the number of days for computing weighted average balance is considered as 1.

The profit allocation for the account class is as follows:

Profit allocation for the account class = (Weighted Average balance of account class/Weighted Average balance of all the account classes) * Total profit made by the fund.

The system internally stores the profit allocated for the account class and the weighted average balance of the account class for the fund.

If the fund profit distribution type is fixed then the system completes memo accruals for the deposit accounts. The memo accrual details are also stored internally.

5.12 Allocating Profit

The profit to be distributed to the investors can be computed using the ‘Profit Allocation Detailed’ screen. With this you can view the Investor Share from the profit made by the fund. You can invoke the ‘Profit Allocation Detailed’ screen by typing ‘IADPRALC’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you can capture the following details:

Fund Identifier

Select the Fund Id from the option list. The list contains all the valid funds for which the profit calculation option is checked and due on that particular day. On selecting the Fund Id the Fund

Description

Description is automatically displayed.

Account Class

Select the account class for which the profit distribution is to be performed from the option list. The list contains all account classes linked to the fund.

Fund Currency

Displays the fund currency.

Allocation Date

Displays the profit allocation date of the fund. The system defaults the profit calculation due date to the fund.

Profit

Displays the profit earned by the fund.

Profit Allocated

Displays the profit that is allocated for the account class.

Fee Percentage

Specify the percentage of profit allocated for computing fee amount.

Reserve 1 Percentage Of

Specify the percentage of profit allocated for computing reserve1 share.

Reserve 2 Percentage Of

Specify the percentage of profit allocated for computing reserve 2 share.

Bank Share Percentage Of

Specify the percentage of profit allocated for computing the bank share. This is disabled if the profit distribution type is selected as ‘Fixed’.

The bank share is computed as follows:

Bank share = Profit allocated for account class - reserve1-reserve2- fee –investor share

Investors Share

Displays the total profit to be distributed to the investors.

Distribution Rate

Displays the rate applied towards distribution of profit to the investors.

If the profit distribution type is ‘Fixed’ then the system displays the distribution rate from the UDE maintained as part of IC general conditions for the account class. The UDE rate is picked using the product and UDE ID maintained in profit distribution UDE linkage maintenance. The investor share is fetched using the memo accrual details.

Refer the topics ‘Maintaining the Profit Distribution Rate UDE’ and ‘General Condition for Deposit Accounts’ in the Profit and Charges User Manual for more details on the profit distribution UDE and General Conditions for the account class respectively.

If the profit distribution type is ‘Variable’ then the system computes the investor share as follows:

Investor share = Profit allocated for account class – Reserve1-reserve2 – Fee –Bank share

The system derives the distribution rate based on the investor share.

The save processing displays the distribution rate as UDE value in general conditions maintained for the account class product combination. This is done only for variable profit distribution. The UDE value for linked finances is also updated.

Note

Before profit allocation, it is important to ensure that the accrual wrapper batch and profit calculation batch are processed.