Administering Purchases

This chapter provides an overview of purchase administration and discusses how to:

Run the Convert Currencies process.
Run the Calculate Prices process.
Run the Purchase Stock process.
View stock purchase participant summaries.
Run the Confirm Purchase process.
Run the Unconfirm Purchase process.
View process results.

Understanding Purchase Administration

This section lists prerequisites and provides overviews of the steps for administering stock purchases and stock purchase reports.

Prerequisites

Before you administer participant purchases:

Make sure that your system administrator sets up the currency related General Option Tables. Specific steps the system administrator should take are:
- Define the market rate index.
- Define the rate type.
- Define the exchange rates.
- Define the rate definitions.
Run the Update Participants and Gather Contributions processes.

See Also

The Gather Contributions Process

Setting Up and Working with Currencies

Steps for Administering Stock Purchases

Stock purchase process consists of several separate steps that you perform in the following order:

Update participants.
Gather contributions.
Convert currencies.
Calculate prices.
Purchase stock.
Confirm purchase.

Steps 1 and 2 are covered in other chapters. This chapter discusses steps 3 to 6.

You can run the Calculate Prices process at any time, but you must run it before the Purchase Stock process. To correct errors in a confirmed run, you must run the Unconfirm Purchase process, make your corrections, then run the Confirm Purchase process again.

Stock Purchase Reports

Stock Administration delivers a number of reports that enable you to view detailed and summary information on stock purchase activity:

Plan Summary (STES001)
Purchase Receipts (STES010)
Refund/Carry Forward (STES006)
Grant Value Limit Detail (STES015)
Transfer Agent Instructions (STES008)
Broker Deposits (STES009)
Disposition Receipts (STES013)
Disposition Survey (STES0011)
Options Shares Granted (STOP002)

See Also

Stock Administration Reports

Running the Convert Currencies Process

This section provides an overview of the currency conversion process and discusses how to convert currencies.

Currency Conversion

If your company administers its plan globally, some participants might make contributions in a currency other than the stock currency, USD. Before you run the Purchase Stock process, convert these contributions into the stock currency.

Stock Administration relies on several Human Resources Management general option tables in the currency conversion process. Your system administrator defines these tables based on your company’s business rules and enterprise-wide requirements. Work with your system administrator to understand the parameters defined for your company and to make sure that they are adequate for your stock purchase plans.

The exchange rate for each currency to the stock currency is the key component of the Convert Currencies process. You define the exchange rate used in the process on the Stock Purchase - Currency page. For each currency combination, the calculated market rate (based on the market rate index, rate type, and exchange date) and an actual exchange rate used in the process appears, providing an audit trail of the conversion process.

The Convert Currency process (ESPP_CONVERT) uses the currency conversion index and rate types that you set up for the plan. It finds all the currency codes loaded in your contribution table that must be converted. Based on the exchange currency set up at the trading exchange, the system multiplies the contribution amount by the multiplier factor set up in the currency exchange index. You see both the original contribution currency amount and the converted stock currency.

The Convert Currency process occurs in three stages.

Refresh Process

The refresh process compares, then refreshes, the existing rows of data for currency conversion to the most current data. It identifies all valid from and to currency combinations for the specified offering and purchase period end date. If it finds any new combinations, it inserts them into the currency table for the purchase definition. If there are any updates that change the data in the currency table, such as a rate change, the system updates the existing data to reflect the most current market rate data. Because you can override the actual exchange rate, this field is updated only if the previous market rate and previous actual exchange rate are identical. If the rates differ, you receive a warning message to review and verify the exchange rate data before running the Purchase Stock process.

You can run the refresh process by either of two methods:

Click the Refresh button on the Stock Purchase - Currency page. This enables you to view the most up-to-date information for the Convert Currencies process. After you click the Refresh button, a batch process refreshes the data on the page.
Select the Convert Currency check box on the Process Stock Purchase page. The refresh process runs each time the Convert Currencies process runs.

Conversion Process

This process runs each time the Convert Currencies process runs. The system calculates the stock contribution amount by multiplying the contribution amount by the rate multiplier and then dividing by the rate divisor for the market rate index, rate type, and exchange date specified.

Rounding of Converted Contributions

This process rounds the converted contributions to the number of decimal places specified for the currency code in the Currency Code Table.

Procedure for Converting Currencies

To convert currencies:

Run the Convert Contributions process.

Select the Convert Currency check box on the Process Stock Purchase page.
View participant contributions and make manual adjustments using the Review Contributions page and the Review Residual Contributions page.

See Also

Setting Up and Working with Currencies

Pages Used to Convert Currencies

Page Name	Object Name	Navigation	Usage
Process Stock Purchase	ST_RUNCTL_PURCH	Stock, Stock Purchases, Process Stock Purchase	Run a process to convert currencies for a stock purchase.
Review Contributions	ST_CONTRIB_PARTIC	Stock, Stock Purchases, Review Contributions	View a participant's contributions.
Review Residual Contributions	ST_CONTRIB_RSDL	Stock, Stock Purchases, Review Residual Contributions	View a participants contributions that are left over from a previous stock plan purchase and determine their disposition.

Running the Calculate Prices Process

This section provides an overview of the Calculate Prices process and discusses how to calculate purchase prices.

The Calculate Prices Process

You can run the Calculate Prices process (ESPP_PRICE) at any time; however you must run it before you run the Purchase Stock process.

The Calculate Prices process calculates the grant FMV, purchase FMV, purchase price before discount, and purchase price based on the rules defined for the plan. The process also performs various error checking, such as verifying that the trading days and holidays in the Stock Daily Price and Holiday Schedule tables are in sync and other setup features are logical before it proceeds.

Grant dates determine the beginning price for a participant’s stock in an offering period and are defined on the Offering/Purchase Periods - Grant Dates page. The price rounding rules, and the number of decimals, are defined on the Stock Purchase Plan Rules - Purchase page.

The purchase period defines the length of time in which participants make contributions towards the stock purchase. The system maintains five types of prices for each grant date within a purchase period:

Grant FMV: Fair market value of the stock on the grant date.
Purchase FMV: Fair market value of the stock as of the purchase period end date.
Calculated price before discount: System-calculated purchase price, before discount, based on the purchase price method defined at the stock purchase plan level.
Calculated purchase price after discount: System-calculated purchase price based on the purchase price method and discount defined at the stock purchase plan level.
Antidilution price: Applicable to antidilution purchases.

Steps for Running the Calculate Prices Process

To calculate prices:

Run the Calculate Prices process in one of the following ways:
- Click the Calculate button on the Purchase Prices page. This enables you to view the most up-to-date information for the Calculate Prices process. After you click the Calculate button, a batch process recalculates the prices for all grant dates within the purchase period.
- Select the Calculate Prices check box on the Process Stock Purchase page. This process runs each time the Calculate Prices process runs.
View purchase prices and make manual adjustments using the Purchase Prices page.

Note. If the plan’s purchase price method is user defined (according to your selection on the Stock Purchase Plan Rules - Purchase page), you must enter prices manually before the purchase using the Calc Prices page.

Page Used to Calculate Purchase Prices

Page Name	Object Name	Navigation	Usage
Determine Purchase Price	ST_PURCHASE_PRC	Stock, Stock Purchases, Determine Purchase Price	Calculate the prices associated with a stock purchase. You must first define the plan rules and enter daily prices for the purchase period. Enter prices if the plan’s purchase price method is User Defined.

Calculating Purchase Prices

Access the Determine Purchase Price page.

Note. If the selected method for calculating prices is User Defined (according to the Stock Purchase Plan Rules page) you must enter price information on the Purchase Prices page before the purchase.

Calculate button	Click the Calculate button to run the Calculate Prices process. The system recalculates prices for all grant dates within the purchase period. The new calculated purchase price is the purchase price by default, unless you previously changed the purchase price.
Grant FMV	FMV as of the grant date. The price is calculated based on the grant FMV method defined on the Stock Purchase Plan Rules - FMV Rules page.
Purchase FMV	FMV as of the purchase period end date. The price is calculated based on the purchase FMV method defined on the Stock Purchase Plan Rules - FMV Rules page.
Price before Discount	Purchase price before any applicable discount is calculated.
Purchase Price	The purchase price is based on the purchase price method and discount defined on the Stock Purchase Plan Rules - Purchase page.
Anti Dilution Price	If this is an antidilution purchase, enter the antidilution price. The default is zero.

Running the Purchase Stock Process

This section provides an overview of the Purchase Stock process and discusses how to purchase stock.

The Purchase Stock Process

The Purchase Stock process (ESPP_PURCHASE) is the final calculation in the stock purchase process. It calculates the number of shares that can be purchased by the participants identified in the Update Participants process for the contributions collected by the Gather Contributions process at the price identified by the Calculate Prices process for the grant date in the offering period. The purchase ID (defined in the Stock Purchases component) defines the purchase details.

The stock purchase plan defines the rules for the purchase of stock in the Stock Purchase process. The purchase period limits, offering period limits, purchase grant value limits, and residual contribution rules determine how many shares participants can purchase and the contributions that can be used towards the stock purchase.

The purchase process derives the number of shares that a participant can purchase based on the contributions gathered and the share, contribution, and value limits. If a participant will exceed a limit, the system adjusts the contribution to allow a purchase within the defined limit. Contributions over the limit are set to residual contributions and are processed according to plan definition.

The purchase remains pending until you confirm the purchase. You can rerun the purchase process repeatedly. Each time, the process recalculates and captures changes made by other processes, such as calculate prices or gather contributions.

Process Groups

The purchase process runs by process group in the order defined on the Stock Purchase - Process Groups page. You can process all groups, an individual group, or an individual participant. The processing order is important when a participant spans multiple process groups, for example, when a participant (employee) transfers from one organization to another, and has multiple sets of contributions. Although the system supports this structure, the best practice is to report the participant’s contributions with the primary process group.

The processing order impacts a participant’s limits. The first purchase that you process absorbs the majority of the limits. Because the purchase process enables you to run preliminary calculations for all groups and individual groups, there’s a potential that the system might not calculate the limits properly unless you rerun all process groups that contain the same participant. In a subsequent processing, the system bases the calculations for a participant on the previous process group. If you recalculate the initial process group without recalculating other process groups that contain the same participant, the calculations might be incorrect if the participant reaches a defined limit.

The system generates a message for all participants who have contributions in multiple process groups. You can select those participants and process them separately by selecting the run method of Process by Participant.

Purchase Calculations

The Gather Contributions process identifies each participant’s contributions that are available to the purchase process. The system performs several calculations for each participant to determine the number of shares that a participant may purchase.

By process group and stock plan for the purchase period:

Calculation	Method
Total contributions	Sum of all the participant contributions from ST_CONTRIB_PART for the process group and stock offering / purchase period and plan.
Shares purchased	Total contributions / (purchase price × proration %). For an antidilution purchase, this is total contributions / antidilution price.
Purchase value	Purchase price × shares purchased.
Residual contributions	Total contributions − purchase value.

Across all process groups and stock plans for the purchase period within the current purchase period:

Calculation	Method
Shares purchased	Sum of all shares purchased for the stock offering and plan which are outside of the current process group but within the stock offering / purchase period and plan.
Grant value	Shares purchased × grant FMV.

Across all process groups and stock plan for the purchase period outside the current purchase period but within the same offering period:

Calculation	Method
Shares purchased	Sum of all shares purchased for the stock offering and plan that are within the current stock offering and plan but outside the purchase period + shares purchased (purchase period) (see previous).
Grant value	Sum of (shares purchased for the stock offering and plan that are within the current stock offering and plan but outside the purchase period × individual grant FMVs) + sum (shares purchased (purchase period) × grant FMV).

Across all process groups for the same stock regardless of stock plan:

Calculation	Method
Grant value − calendar year	Sum (shares purchased for the stock × grant FMV) when the purchase period end date is between 01/01 of the year of the purchase period end date and 12/31 of the year of the purchase period end date.
Grant value − years outstanding	Sum (shares purchased for the stock × grant FMV) when the purchase period end date is between 01/01 of the year of the offering period begin date and 12/31 of the year of the offering period end date.

Order of Limits

Because you define multiple limits for a stock purchase plan, the order in which the system processes the limits is important. The order is:

Purchase period contribution limit.
Offering period contribution limit.
Purchase period participant share limit.
Purchase period grant value limit.
Offering period participant share limit.
Offering period grant value limit.
Purchase value limit (IRS section 423).

As a participant reaches these limits the system recalculates the following based on the limit:

Contributions available to purchase stock.
Shares purchased.
Grant value.
Purchase value.
Residual contributions.

Processing Results

The system holds all contributions gathered for participants that you’ve selected with a Hold Purchase flag. These contributions are carried forward or refunded, depending on the stock purchase plan setup rules.

After you calculate the final shares for a process group, you can view each participant’s final shares using the Review Contributions page.

The participant issuance instructions determine whether the purchase process issues a certificate or makes a deposit to a brokerage firm. If no issuance instructions exist for a participant, the default option is to issue a certificate. If a certificate is issued, the mailing address established for the employee is used. If no mailing address is established, the home address is used.

Residual Contributions

Contributions left over from the purchase, called residual contributions, are refunded to the participant or carried forward to a future purchase. Contributions are typically leftover due to rounding, fractional shares, participant limits, or a Hold Purchase flag.

The stock purchase plan rules define the handling of residual contributions in the purchase process. The leftover residual contributions are converted back to the currency code of the process group. The exchange rate used is the reverse of the exchange rate used to convert from the source currency to the stock currency. The price is rounded according to the number of decimal places defined for the currency code. You can view a participant’s residual contributions using the Review Residual Contributions page.

Steps for Running the Stock Purchase Process

To purchase stock:

Run the Purchase Stock process using the Purchase Stock page.
View purchase results using the Review Contributions page and the Review Residual Contributions page.

Page Used to Run the Purchase Stock Process

Page Name	Object Name	Navigation	Usage
Process Stock Purchase	ST_RUNCTL_PURCH	Stock, Stock Purchases, Process Stock Purchase	Run the Purchase Stock process. Specify the purchase ID definition to use and the processes to run.

Purchasing Stock

Access the Process Stock Purchase page.

Gather Date

Enter the date on which the contributions were gathered.

Purchase Process Flags

Select the process or processes to run. Each process can be run separately or in a combined sequence.

Update Participants	Run this process at any time.
Gather Contributions	If you have Payroll for North America, you must run the payroll process first.
Convert Currencies	Run this after you gather contributions.
Calculate Prices	Run this after you gather contributions and convert currencies.
Purchase Stock	Run all other processes before running the Purchase Stock process.
Run Method	Select a run method: Process All: Process all groups and individuals defined in the purchase ID. Process by Group: Select a process group to process in the Process Group field. Process by Participant: Select individual participants to process. The Participant(s) to be Processed group box becomes available so that you can select participants.

Viewing Stock Purchase Participant Summaries

This section discusses how to:

View a participant’s stock purchase summary.
View a participant’s issuance instructions.

After you run the Purchase Stock process and the system calculates the final shares, view the purchase results.

Pages Used to View Stock Purchase Participant Summaries

Page Name	Object Name	Navigation	Usage
Review Participant Summary	ST_PARTIC_PURCH	Stock, Stock Purchases, Review Participant Summary	View the results of a participant’s purchase after you calculate the final shares. You must first run the Purchase Stock process using the Purchase Stock process page.
Purchase Issuance Instructions	ST_PARTIC_PURCH2	Click the Broker/Branch Information link on the Review Participant Summary page.	View a participant’s issuance instructions.
Address Information	ST_EMPL_PURCH_SEC	Click the Address link on the Purchase Issuance Instructions page.	View a participant’s mailing address for stock certificates.
Participants w/o Purchase	ST_RUNCTL_STESPID	Stock, Purchase Reports, Purchase, Participants w/o Purchase	Define run parameters for the Participants w/o Purchase report (STES005A). This report identifies participants who are participants in a period but did not purchase stock. Use this report to audit terminations and leaves of absence.

Viewing a Participant’s Stock Purchase Summary

Access the Review Participant Summary page.

Period End Date	Displays the offering period end date.
Purchase Value	Displays the purchase value, calculated by multiplying the number of shares purchased by the purchase FMV.
Total Discount	Displays the purchase discount.
Residual Amount	Displays the amount remaining after the purchase.
Previous Carry Forward	Displays the amounts carried forward.
Residual Type	Identifies how the residual amount is handled: Refund or Carry Forward.
Broker/Branch Information	Click to access the Purchase Issuance Instructions page.

Viewing a Participant’s Issuance Instructions

Access the Purchase Issuance Instructions page.

Period End Date	Displays the offering period end date.
Issuance Type	Displays Broker or Certificate.
Transfer Control Number	Displays the control number generated when the Transfer Agent Instructions report has run.
Transfer Issue Date	Displays the date on which the transaction is sent to the transfer agent.

Broker/Branch

If the issuance type is Broker, these fields display data.

Control Nbr (control number)

Displays the control number generated at issuance.

Certificate

If the issuance type is Certificate, these fields display data.

Address

Click to access the Address page, where you view the address to which the stock certificate should be mailed.

The system displays address information from the participant’s issuance instructions. If there are no issuance instructions, information from the participant’s personal data appears.

Running the Confirm Purchase Process

This section provides an overview of the Confirm Purchase Process and lists the page that you use to run the Confirm Purchase process.

The Confirm Purchase Process

You can do preliminary runs of all stock purchase processes until you run the Confirm Purchase process (ESPP_CONFIRM). When you confirm a purchase for a process group, the system confirms all calculations for the purchase, including any carry forward or refund, and marks as Processed the contribution status of all gathered contributions in a purchase ID. It also changes the preliminary system status to Confirm. You can no longer process the purchase period and you cannot make future adjustments.

If participants have residual amounts that are to be refunded through Payroll for North America, the system creates a payroll transaction for each refund.

Page Used to Run the Confirm Purchase Process

Page Name	Object Name	Navigation	Usage
Confirm Stock Purchase	ST_RUNCTL_CNFRM	Stock, Stock Purchases, Confirm Stock Purchase	Confirm a stock purchase. You must first run the Purchase Stock process.

Running the UnConfirm Purchase Process

This section discusses the Unconfirm Purchase process and lists the page that you use to unconfirm a purchase process.

The Unconfirm Purchase Process

To correct errors in a confirmed run, you can undo a confirmation by running the Unconfirm Purchase process, correct errors and confirm again. When you unconfirm a purchase for a process group, all confirmations for the purchase, including any carry forward or refunds, are undone.

If you undo a refund confirmation that’s been sent to Payroll for North America, you must do additional processing. If Payroll for North America has not processed the transaction, it is removed from the Payroll Transaction table (PSHUP_TXN). If the system has processed the transaction, the refund must manually be reversed. Process the reversal manually using the Payroll Reverse Refunds report. You cannot undo a purchase confirmation from which there is a disposition.

Page Used to Unconfirm a Purchase Process

Page Name	Object Name	Navigation	Usage
Unconfirm Stock Purchase	ST_RUNCTL_UNCNFRM	Stock, Stock Purchases, Unconfirm Stock Purchase	Undo the results of a confirmed purchase process so that you can correct errors.

Viewing Process Results

This section discusses how to view messages that are generated by the Purchase Stock process.

Defining Offering and Purchase Periods

Pages Used to View Process Results

Page Name	Object Name	Navigation	Usage
Review Messages	ST_ESPP_MESSAGES	Stock, Stock Purchases, Review Messages	View any messages that resulted from the Purchase Stock process.
Review Offering Periods Inquiry	ST_OFFERING_INQ	Set Up HRMS, Product Related, Stock, Purchase Plans, Review Offering Periods	View the offering periods for a selected stock ID and stock plan and their related purchase periods.
Purchase Period Inquiry	ST_PURCH_PD_INQ	Click the offering ID on the Review Offering Periods Inquiry page.	View the purchase period begin and end dates.
Purchase Price Inquiry	ST_PURCH_PRC_INQ	Click the period end date on the Purchase Period Inquiry page.	View purchase price information for the purchase periods.
Currency Conversion	ST_RUNCTL_STESPID	Stock, Purchase Reports, Purchase, Currency Conversion	Define run parameters for the Currency Conversion report (STES003). Use this report to view the results of a currency conversion for audit and reconciliation.
Purchase Summary	ST_RUNCTL_STESPID	Stock, Purchase Reports, Purchase, Purchase Summary	Define run parameters for the Purchase Summary report (STES004). Use this report to view the results of the preliminary or final purchase process.

Viewing Messages from the Purchase Stock Process

Access the Review Messages page.

This page displays PeopleSoft-delivered processing messages as well as messages that you add using the stock purchase Message Table setup page.

Process Type	Displays the type of process that produced the message.
Message ID	The system can produce multiple messages per participant.
Message Data	Displays the field values associated with the message. Up to four field values can appear.