2. Dividend Maintenance

A fund or an AMC normally shares a portion of its profits with the unit holders by declaring a dividend. By way of receiving a dividend, the unit holders receive their share of the profits, as monetary returns or as increased stock in the funds of the AMC.

Typically, an AMC declares dividends at a regular frequency, depending upon the type of fund and its performance. For money market funds, for instance, there may be daily declaration of dividends. For equity funds, dividends may be declared once a year or every quarter.

Unit holders can receive dividends as payment or choose to reinvest the dividend in the same fund or different funds.

A few important terms must be understood clearly about dividends:

Record Date (Freeze Holdings Date)

When a dividend is declared, a record date is also announced. Any unit holders that hold shares of the company as on this announced record date are eligible to receive dividend.

The holdings balance of the unit holder that is considered for eligibility for dividend on the record date could be the entire holdings including provisional units and blocked units, or it could be only the confirmed balance as on the record date, depending upon the specification made for the fund. The non permissible income (NPI) portion of the earnings is identified if NPI is applicable for the fund.

Book Closing Dates

When a dividend is declared, the company also identifies a period during which no transactions will be accepted and the financial books will be closed. During this period, an inventory of the holdings of the unit holders is taken, and those that are eligible to receive dividend based on their holdings on the record date are identified.

Directors Meeting

In an AMC, the decision to declare dividends is made at a meeting of the board of directors of the AMC. The dividend is also ratified at this meeting.

Cash Dividend

In some funds, unit holders receive their dividends as monetary returns, which can then be reinvested (if desired) in any of the funds of the AMC.

Stock Dividend

In some funds, unit holders receive dividend in the form of a proportionate number of units (holdings), rather than monetary returns. Such dividend always results in an increase in the holdings balance of the investor, and is called a stock dividend. It is exempted from tax. The dividend units are always reinvested into the same fund, for the same unit holder.

The dividend is usually declared as a ratio. For instance, if the declared stock dividend is 2:3, then, for every two units eligible for dividend on the freeze holdings date (from a fund), the unit holder receives 3 units as dividend, which will be reinvested (as subscription transactions in units mode) into the same fund for the unit holder.

Regular Dividend

Dividends are declared by the company / AMC at a frequency that is decided by the directors. Such dividends are called regular dividends.

The board of directors may decide to skip a regular dividend, if deemed necessary, when they feel that the profits gained do not justify a dividend declaration.

Interim Dividend

An AMC / company may decide to declare an ad-hoc dividend independent of the regular frequency, for the purpose of distributing the profits gained during a period in which the fund has done exceptionally well. This is called an interim dividend.

Dividend Declaration Frequency and Dividend Payment Frequency

This is the frequency at which the board of directors decides to declare dividend for a fund. The board may not actually decide to process and pay out dividends when they are declared, but may decide on a different frequency for payment. The frequency at which the board of directors decides to process and pay out dividends that have been declared is known as the Dividend Payment Frequency.

Example

Let us suppose that for the Malcolm Green Income Fund, the board of directors for the fund decides to declare dividend every quarter, and the first declaration is made on 24th January 2002. The board of directors also decides to process and pay out dividend to its shareholders twice each year.

The declaration and payment would occur in the following pattern:

Dividend Declaration Dates

Dividend Number

Dividend Payment Dates

Payment Number

24th January 2002

0

 

 

24th April 2002

1

 

 

24th July 2002

2

24th July 2002

0

24th October 2002

3

 

 

24th January 2003

4

24th January 2003

1

This chapter contains the following sections:

2.1 Dividend Processing in the System

This section contains the following topics:

2.1.1 Maintaining and Processing Dividends

Oracle FLEXCUBE Investor Servicing enables the maintenance of dividend for funds, as well as the computation and payment of the same.

The sequence of events that enable the maintenance of dividend is explained below, under the following sequential heads:

2.1.2 Maintaining Rules for Dividend Processing for Fund

In the Corporate Actions screen, you can define the rules for each type of dividend that must be processed for a fund – cash or stock. If both types need to be processed for a fund, you can maintain two corporate actions profiles for each type.

To understand how you can maintain rules for dividend processing through the Corporate Actions screen, refer the chapter ‘Setting up Funds’ in Volume One of the Fund Setup User Manual.

2.1.3 Maintaining Rules for Withholding Tax for Investor Category

You can maintain the withholding tax parameters applicable for an investor category and country of domicile, in the Withholding Tax Setup screen.

To understand how you can maintain rules for withholding tax processing through the Withholding Tax Setup screen, refer the chapter ‘Maintaining Reference Information’ in the Reference Information User Manual.

2.1.4 Dividend Cycle for Fund

The system reckons the dividend processing cycle for the fund (and dividend type) from the dividend declaration frequency and the dividend payment frequency specified in the Corporate Actions profile.

The system automatically updates the next date upon which a regular dividend is due for a fund. This is based on either of the following bases:

2.1.5 Generation of Dividend Declaration Record

The system automatically generates a dividend record for declaration during the Beginning of Day process on the next dividend date, using the dividend cycle for the fund and dividend type. If the fund is a multi distribution fund, then the system generates a dividend record for each distribution type.k

When the dividend record is generated, the system also defaults the following dividend information using the specifications in the Corporate Actions profile for the fund and dividend type:

Freeze Holdings Date = Dividend Declare Date – Freeze Holdings Lead Time

2.1.6 Maintaining Details of Dividend Declaration

On the next date on which the dividend declaration is due, you must specify the following details for the declaration in the Fund Dividend Maintenance screen:

As explained in the previous section, the system defaults the dividend period, the dividend declare date and the freeze holdings date when it generates the dividend record. This defaulted information is displayed in the Fund Dividend Maintenance screen, but it can be overridden.

For Zero Distribution of funds, you can select the process type as Zero Distribution if the fund is processed for G2-G1 movement. This option is applicable for equalization funds only.

You can access the Fund Dividend by clicking on Detail under the Fund Dividend menu in the Browser.

2.1.7 Authorizing Dividend Declaration in System

After a dividend declaration record has been maintained for the fund in the Fund Dividend Maintenance screen, it must be authorized by another user for it to be effective in the system.

After authorization, the dividend is ready to be processed.

To authorize a declared dividend, use the Fund Dividend Maintenance Summary screen. You can access this screen by clicking Summary under the Fund Dividend menu in the Browser.

2.1.8 Processing Declared Dividend

After the declared dividend is authorized, you can begin the processing for the dividend.

The computation and payment of dividend involves the following processes in the system:

You can the reference number for the dividend payment in the Fund Dividend Payment screen, which you can access from the Process Dividend Payment screen by clicking the ‘Payment Details’ button.

The Dividend Payment Date

In the Fund Dividend Payment screen, the system defaults the payment date as follows:

Dividend Payment Date = Last dividend processed date + Dividend payment frequency + Payment lag, if any.

Here, the holiday rule specified for the fund and dividend type in the Corporate Actions profile is used to arrive at the payment date.

Freeze Holdings Process

The freeze holdings process identifies the unit holders that hold units that are eligible for dividend, as on the freeze holdings date.

The manner in which the system identifies the effective freeze holdings date has been explained under the section ‘Generation of dividend declaration record’, earlier on in this chapter.

In case of Uncleared or Blocked transactions, the Uncleared and blocked transactions are tracked separately during dividend processing. The total cleared balance will be the difference between the sum of all blocked units for all block transactions and the total unit balance (excluding provisional units for uncleared transactions).

During the freeze holding process, the identification of holdings for dividend eligibility is done based on the following criteria:

“*” – as specified in the Corporate Actions profile for the fund and corporate action type.

In a distributor installation, if the units to be considered for dividend are specified as “Confirmed Units” in the Corporate Actions profile, only the units confirmed to the AMC as on the effective freeze holdings date are considered eligible.

This can be understood from the following example:

Let us consider a distributor, Carling Finance. For the fund Banco Italia Income Fund marketed by Carling Finance, only units of unit holders that have been confirmed to the AMC for which Carling Finance is a distributor, as on the freeze holdings date, are to be considered for dividend eligibility.

The confirmation lag that has been specified for the fund is 1 for subscription transactions, and 2 for redemption transactions.

A unit holder, Mr Alfred Werker, has entered into the following transactions in the Banco Italia Income Fund:

Transaction Reference Number

Transaction Date

Transaction Type

Units Allocated and Confirmed

Confirmation Date

S1

2/1/2001

Subscription

1000

3/1/2001

S2

3/1/2001

Subscription

2000

4/1/2001

R1

4/1/2001

Redemption

1000

6/1/2001

Therefore, the confirmed units balance for Mr Werker would be as follows:

Unit balance on 2/1/2001 = 0 (assuming there is no brought forward balance from the previous working day)

Unit balance on 3/1/2001 = 1000 units

Unit balance on 4/1/2001 = 1000 + 2000 = 3000 units

Unit balance on 6/1/2001 = 3000 – 1000 = 2000 units

The effective freeze holdings date specified for the Banco Italia is 5th January 2001. The total unit balance on the freeze holdings date = 2000 units. Since only confirmed units are considered for dividend eligibility, the total confirmed units balance on freeze holdings date = 3000 units, since the redemption units have not been confirmed as on 5th January.

Therefore, the total number of confirmed units eligible for dividend as on the freeze holdings date = 3000 units.

Computation of dividend and withholding tax

After the units eligible for dividend have been identified, the system computes the dividend payable. During this process, any applicable withholding tax is also calculated and deducted.

Withholding tax is computed only for cash dividends, according to the rules set up for the investor category and country of domicile, in the Withholding Tax Setup record.

For a fuller understanding of the rules maintained for withholding tax, refer the chapter

Withholding tax is computed in the computation currency specified in the Withholding Tax record. The prevailing exchange rate is used to convert the amount into the tax payment currency, also specified in the Withholding Tax record.

The net dividend amount after deduction of withholding tax is then arrived at by the system.

Payment of cash dividends

The Income Distribution Setup maintained for each unit holder determines the manner in which cash dividends are paid out to the unit holders.

For cash dividends that are to be paid out, you must enter the details of the accounts to which the dividend payments must be made, in the Fund Dividend Payment screen. You can access this screen from the Process Dividend Payment screen itself, by clicking the ‘Payment Details’ button.

In the Fund Dividend Payment screen, the system defaults the payment date as explained earlier.

If there is a lag specified for payment, then it will be deferred accordingly. The lag is interpreted as working days. For instance, if the Dividend Payment Date is 15th January 2002, and the payment is to be lagged by 2 days, then the payment will be made on 17th January, provided the intervening dates are not holidays in the system.

Reinvestment of cash dividends

For cash dividends that are to be reinvested according to the Income Distribution Setup option for the unit holders, subscription transactions by gross amount (the reinvestment amount) are initiated. The transaction date or Value Date for the reinvestment transactions is set by default to be the application date. If there is no lag specified for reinvestments in the Corporate Profile, the date of dividend payment itself will be the Value Date.

You can initiate the reinvestment transactions through the Process Reinvestments screen. You can access this screen from the Batch menu category in the Browser menu.

If a reinvestment lag has been specified for the fund and dividend type in the Corporate Actions profile, the initiation of the reinvestment transactions is deferred accordingly.

The End of Day processes will allocate the reinvestment transactions on the date of entry, using the prevalent price for subscriptions.

Reinvestment of stock dividends

In the case of stock dividends, the unit holder’s Income Distribution Setup options are not considered. The number of units to be reinvested is arrived at using the units eligible for dividend and the stock ratio. This computed number of units is reinvested into the same fund, as subscription transactions in units mode, with the value date being the application date. This will be the same as the dividend payment date, provided there is no reinvestment lag specified for stock dividends in the Corporate Profile.

You can initiate the reinvestment transactions through the Process Reinvestments screen. You can access this screen from the Batch menu category in the Browser menu.

If a reinvestment lag has been specified for the fund and dividend type in the Corporate Actions profile, the initiation of the reinvestment transactions is deferred accordingly.

The reinvestment transactions, in the case of stock dividend, are allocated online, with the price being taken as zero.

2.2 Dividend Processing Automation

If your installation requires it, the whole process of dividend declaration, computation and payment can be automated in the system. In such a case, all data required for the declaration and processing of dividend is defaulted by the system based on the specifications made for the fund and dividend type in the Corporate Actions profile.

The process of defaulting is as explained above, without any user intervention. In such a case, for cash dividends, an interface with an external system must be maintained for the purpose of uploading the EPU component values.

The automation feature is not available unless your installation has requested for it.

2.3 Dividend Processing for NPI Funds

As per Shariah laws, the non permissible portion of the dividend earnings (NPI) can not be reinvested. Even if the customer has opted for reinvestment, the NPI portion will either be paid out to the customer or to a fund trust, whichever is applicable, and only the remaining portion will be reinvested.

If NPI is applicable for a fund, during the Freeze Holding Process, system identifies the cleared and un-cleared balances separately. The un-cleared portion of the dividend will be reinvested.

Tax will be computed on the total balance, if any. If the dividend is not based on components, then apportioned tax for the NPI portion is arrived at as follows:

Tax on NPI = (Total Tax/ Total EPU)* NPI EPU

This amount is deducted from the total NPI amount to arrive at the net NPI amount that is to be paid out to the investor.

While processing reinvestment transactions, system generates separate subscription transactions for cleared and un-cleared portions, if the preference for un-cleared balance is ‘Force Re-investment’. However, if the IDS option is to be considered, then system will not generate separate reinvestment transactions.

After computation of the NPI portion and the un-cleared portion, the Income Distribution options (IDS) specified for the unit holder will be applicable for the remaining dividend amount.

2.4 Dividend Processing for Beneficiaries

Dividends that a unit holder is entitled to, can be distributed among the beneficiaries maintained for the unit holder provided the beneficiaries are existing unit holders and not third party beneficiaries. To facilitate this, you are required to check the ‘Dividend Payout’ option in the ‘Unit Holder Maintenance Detail’ screen and subsequently maintain at least one existing unit holder as a beneficiary along with the percentage of dividend to be awarded.

The following are the salient points for the processing:

Note

You can also perform Mock Dividend processing, Interim Dividend processing, Dividend Re-processing, Dividend Amendment and Reversal on the dividend paid out.

2.5 Fund Dividend Maintenance

This section contains the following topics:

2.5.1 Invoking the Fund Dividend Maintenance Screen

You can use this screen to maintain the dividend declaration details for a fund, for either a cash dividend or a stock dividend. This maintenance also supports the following:

Invoke the ‘Fund Dividend Detail’ screen by typing ‘UTDFUDIV’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. The Fund Dividend Detail screen is displayed. Select ‘New’ from the Actions menu in the Application tool bar or click new icon to enter the details of the fund dividend.

Fund ID

6 Character Maximum, Alphanumeric, Mandatory

Select the Fund ID, for which the dividend is being set up, from the list provided. The list will display all the funds that have been authorized, along with their latest rule enabled. When you specify the ID of the fund, the ISIN Code of the fund is displayed in the ISIN Code field.

ISIN Code

12 Characters Maximum; Alphanumeric; Mandatory

Select the ISIN Code of the selected fund. If you specify the ISIN Code of a fund, the ID of the fund is displayed in the Fund field.

Fund Base Currency

Display Only

After you select the Fund ID, the base currency for the selected fund is displayed in this field.

Dividend Status

Display Only

The system displays the status of the dividend, based on the status of the fund. The dividend could be a new one, or the fund could be in its book-closing period, or after the directors meeting. This information is displayed here by the system.

Dividend Number

Numeric, Display

The serial number of the dividend being declared, generated by the system, is displayed. In generating this number, the dividend number of the last, most recent declaration is incremented by 1.

Dividend Type

Display Only

If the dividend being entered is part of the dividend cycle for the selected fund, it is a regular dividend. If it is an ad-hoc declaration, it is an interim dividend.

Process Type

1 Character Maximum, Alphanumeric, Mandatory

The specification in this field indicates whether the dividend being entered has been processed.

By default, the Non Zero Distribution option is selected here, if you are entering a new dividend. If the dividend is to be skipped, select Skip. If Zero Distribution is selected, then the system processes the record with the Earnings per Unit (EPU) as ‘Zero’. Also, the income equalization field will be systemically set to zero. Dividend reversals are also enabled for the zero distribution process. This amendment process supports the following:

Distribution Type

Alphanumeric, Mandatory (if corporate action type is Cash)

The system displays the following options based on the values maintained in the Corporate Action tab of the Fund Rule Maintenance screen:

The system validates whether the distribution type is of Corporate Action type ‘Cash’. The list of values are populated based on the fund maintenance, that is, if the fund has only dividend distribution type or two to three distribution types maintained, then the values are populated accordingly.

Gross/Net Indicator

Display

The system displays the Gross or Net indicator based on the value maintained in the Corporate Action tab of the Fund Rule Maintenance screen.

Dividend From Date

Date Format, Mandatory / Display

The Dividend From Date is the start date of the period for which dividend is being declared. The system defaults this date based on the following criteria:

If overridden, the Dividend From Date should be equal to or later than the Dividend Start Period and equal to or earlier than the Dividend End Period.

Dividend To Date

Date Format, Mandatory

The Dividend To Date is the end date of the period for which dividend is being declared.

The Dividend To Date should be later than the Dividend Start Period and earlier than the Dividend End Period. It should also be later than the Dividend From Date.

Book Closing From Date

Date Format, Mandatory ONLY if Book Closing To Date is specified.

The Book Closing From Date is the start date of the period during which the books of the fund are closed. Any transactions accepted during this period will be allotted only after the book-closing period is over.

If specified, the Book Closing From Date should be the same as or later than the Dividend To Date. It should also be the same as or later than the System Application Date.

Book Closing To Date

Date Format, Mandatory ONLY if Book Closing From Date is specified.

The Book Closing To Date is the end date of the period during which the books of the fund are closed. If specified, it must be the same as or later than the Dividend To Date, and the Book Closing From Date.

Freeze Holdings Date

Date Format, Mandatory

The system defaults the freeze holdings date, from the specifications made in the Corporate Actions profile for the fund and corporate action type, as follows:

Freeze Holdings Date = Dividend Declare Date – Freeze Holdings Lead Time.

The Dividend Declare Date is also defaulted in this screen, to be the same as the Dividend To Date.

You can override this default date if necessary. When you override the default date, you can specify a past date if necessary. (i.e., earlier than the application date),

Directors Meeting Date

Date Format, Optional

The Directors’ Meeting Date is the day after the Book Closing To Date. It is during the directors’ meeting that the dividend is declared. This date must be earlier than the next date on which a regular dividend is due for processing, for the fund and corporate action type.

The system displays the application date in this field, by default. You can override it, if necessary.

Dividend Declare Date

Date Format, Mandatory

Specify the date on which the dividend is to be declared.

The system defaults this date to be the same as the Dividend To Date. You can override it if necessary.

The Dividend Declare Date should be later than the Directors Meeting Date.

Payment Date

Date Format

The system defaults the payment date in this field based on the first or previous payment date, last day of the month, and frequency values.

Reinvestment Date

Date Format

The system defaults the reinvestment date based on the Reinvestment Lag and Payment Date values.

Exchange Rate as on

Mandatory if Dividend Declare Date is specified.

This field is applicable only if the Exchange Rate Basis specified for the fund is Reference Date. In such a case, the exchange rate to be considered is the rate on the reference date specified here.

Corporate Action Type

Alphanumeric, Mandatory

Select the type of corporate action for which the dividend is being declared – cash dividend or stock dividend.

Earnings Per Unit/LOT

Numeric, Mandatory if Dividend Declare Date and Exchange Rate As On are specified, and only for cash dividends.

Specify the Earnings per Unit per Lot, announced during dividend declaration, in the case of cash dividends.

You must specify this value only if the Earnings per Unit are not to be defined in terms of components, but as a single value. If the EPU is to be defined in terms of components, as specified in the Corporate Actions record for this fund and the System Parameters at the Agency Branch, this field is locked for data entry, and you must specify the EPU in terms of its components. To do so, click the EPU/LOT Component Values link to invoke the Fund Dividend Component screen, where you can specify the values for each component.

S D Parent Ratio

Numeric, Mandatory for stock dividends

For stock dividends, specify the stock dividend ratio that is to be applicable for the dividend declaration.

This field is the parent, which represents the units eligible for dividend in the ratio.

S D Resultant Ratio

Numeric, Mandatory for stock dividends

This field is the resultant, which represents the number of units that is gained by the unit holder as dividend for the specified number of parent units eligible for dividend.

For instance, if you specify 2 in the S D Parent Ratio field and 1 in the S D Resultant Ratio, then, for every two units eligible for dividend, the unit holder receives one unit as dividend.

Equalization Rate

Mandatory for Dividend Equalization Funds

Specify the dividend equalization rate to be applied for the units that have not yet received any benefit (income or dividend) so far. You can input a value only if the fund for which you are maintaining dividend is a ‘Dividend Equalization Fund’. In case of other funds, the system will default null here and will not allow any change in the value.

Stock Dividend Type

Select the type of stock dividend from the drop-down list. Following are the options available in the drop-down list:

This field is mandatory if the dividend type is stock dividend.

Whenever a negative stock dividend is declared a redemption transaction should be passed at current NAV/TXNBP 03 based on maintenance. The number of units that has to be redeemed will depend on the negative stock dividend ratio.

Override FATCA WHT

Optional

Select if FATCA WHT for that particular dividend cycle has to be overwritten or not from the drop-down list. Following are the options available in the drop-down list:

Grandfathered obligation

Optional

Select to mark the dividend as grandfathered obligation from the drop-down list. Following are the options available in the drop-down list:

If you select Yes, then the WHT will not be applicable.

FDAP Income

Mandatory

Select to indicate dividend being distributed is FDAP income or not from the drop-down list. Following are the options available in the drop-down list:

2.5.2 EPU/Lot Component Values

You can use this screen to specify the values for each component in the Earnings per Unit/Lot, which are to be applicable for the cash dividend declaration. You can access it by clicking the ‘EPU/Lot Component Values’ tab in the Fund Dividend Detail screen. This link is only available if the EPU is designated as defined in terms of components, in the Corporate Actions profile defined for the fund and the corporate action type.

Component ID

Display Only

Each row in this field displays the ID of an EPU component as defined in the System Parameters set up for the AMC.

Component Value

Numeric, Mandatory

Specify the portion of the EPU that is made up by earnings from each component. The value indicated here must be a per unit figure.

Once you have entered all the EPU component values in this screen, click ‘Ok’ button. The system performs a sum of all the EPU component values that have been entered. . If the sum is a negative value, an error message is displayed, and you must alter the values till a positive sum is obtained. Once this is done, the Fund Dividend Component Screen is closed, and the sum so obtained is populated in the Earnings Per Unit/LOT field.

Note

The Earnings Per Unit should always be greater than zero. Negative EPU components can be specified only if your installation has specifically requested for this feature. An exhaus­tive note on negative EPU components is found in the Annexure.

FDAP Income

Mandatory

Select to indicate component being distributed is FDAP income or not at component level from the drop-down list. Following are the options available in the drop-down list:

Note

The system will perform EPU upload only if there is no unprocessed dividend data or if there is only one unprocessed dividend.

2.5.3 Maintaining Regular Dividends

In the case of dividends that are declared according the dividend cycle and the declaration frequency, the system generates the dividend record for declaration during the Beginning of Day process on the next dividend date.

To maintain the details for this record, you must:

  1. Retrieve it through the Fund Dividend Maintenance Summary screen
  2. Perform an Edit operation through the Fund Dividend Maintenance (Detail) screen, and save your changes.

2.5.4 Maintaining Interim Dividends

In the case of dividends that are declared apart from the normal dividend cycle and declaration frequency, you can maintain the details through the Fund Dividend Maintenance (Detail) screen.

2.5.5 Maintaining Cash Dividend for Fund

Invoke the ‘Fund Dividend Detail’ screen by typing ‘UTDFUDIV’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

 

To maintain details of declaration for a cash dividend for a fund in this screen,

For an interim dividend, only the fund base currency, dividend status, dividend number, dividend type (interim) and the Dividend From Date are defaulted.

For Zero Distribution of Funds, you can select ‘Zero Distribution’ in the Process Type field. Once this value is selected, the system processes the record with EPU as Zero.

For multiple distribution of funds appropriate ‘Distribution Type’ (dividend, interest, property income distribution) values as maintained in the Fund Rule Maintenance screen are defaulted in the Distribution Type field of the Fund Dividend Maintenance screen.

To enable reinvestments on a different date or on the same date as the payment date, the payment date and reinvestment date fields are defaulted by the system. The payment date is derived using the First/Previous date, last day of the month value, and the frequency. The reinvestment date is derived on the basis of the reinvestment lag value (Fund Rule Maintenance) and the payment date.

2.5.6 Maintaining Stock Dividend for Fund

Invoke the ‘Fund Dividend Detail’ screen by typing ‘UTDFUDIV’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

To maintain details of declaration for a stock dividend for a fund in this screen,

For an interim dividend, only the fund base currency, dividend status, dividend number, dividend type (interim) and the Dividend From Date are defaulted.

2.6 Fund Dividend Summary Screen

This section contains the following topics:

2.6.1 Retrieving Record in Fund Dividend Summary Screen

You can retrieve a previously entered record in the Summary Screen, as follows:

Click ‘Search’ button to view the records. All the records with the specified details are retrieved and displayed in the lower portion of the screen.

Note

You can also retrieve the individual record detail from the detail screen by querying in the following manner:

You can perform Edit, Delete, Amend, Authorize, Reverse, Confirm operations by selecting the operation from the Action list. You can also search a record by using a combination of % and alphanumeric value.

Example:

You can search the record for Fund ID by using the combination of % and alphanumeric value as follows:-

2.6.2 Editing Fund Dividend Record

You can modify the details of Fund Dividend record that you have already entered into the system, provided it has not subsequently authorized. You can perform this operation as follows:

Click Save to save your changes. The Fund Dividend Detail screen is closed and the changes made are reflected in the Fund Dividend Summary screen.

2.6.3 Viewing Fund Dividend Record

To view a record that you have previously input, you must retrieve the same in the Fund Dividend Summary screen as follows:

2.6.4 Deleting Fund Dividend Record

You can delete only unauthorized records in the system. To delete a record that you have previously entered:

2.6.5 Authorizing Fund Dividend Record

An unauthorized Fund Dividend record must be authorized in the system for it to be processed. To authorize a record:

2.6.6 Amending Fund Dividend Record

After a Fund Dividend record is authorized, it can be modified using the Unlock operation from the Action List. To make changes to a record after authorization:

2.6.7 Authorizing Amended Fund Dividend Record

An amended Fund Dividend record must be authorized for the amendment to be made effective in the system. The authorization of amended records can be done only from Fund Manager Module and Agency Branch module.

The subsequent process of authorization is the same as that for normal transactions.

2.6.8 Copying the Attributes

If you want to create a new Fund Dividend record with the same attributes of an existing maintenance, you can copy the attributes of an existing Fund Dividend record to a new one.

To copy the attributes:

2.7 Dividend Skipping

A dividend that has been declared can be skipped and not taken up for processing. This is true for cash and stock dividends, as well as for regular or interim dividends. The decision to skip a dividend is typically taken by the board of directors, based on the performance of the fund.

To authorize a fund dividend, use the Fund Dividend Maintenance Summary screen. Access this screen by selecting the Summary option from the Fund Dividend menu in the Maintenance menu category of the Browser menu.

2.8 Dividend Payments Screen

This section contains the following topics:

2.8.1 Processing Dividend Payments

You can use this screen to trigger the processing for a declared dividend, either for a single fund and corporate action type, or a group of funds and corporate action types, as well as for all funds and corporate action types.

Invoke the ‘FCIS Process Dividend Payment’ screen by typing ‘UTDDIPMT’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. The ‘FCIS Process Dividend Payment’ screen is displayed. Select ‘New’ from the Actions menu in the Application tool bar or click new icon to enter the details of the dividend payment to be processed.

 

When you open this screen, all funds for which processing of any of the corporate actions are due on the application date are displayed.

The following details are displayed for each fund and corporate action type:

Fund ID

Display Only

The fund for which the dividend payment details are being specified is displayed here, from the Process Dividend Payment screen.

Corporate Action Type

Display Only

The corporate action type for which the dividend payment details are being specified is displayed here.

Payment Date

Date Format, Mandatory

Enter the Date on which the Dividend Payment is to be done. This must be later than or the same as the application date and must be before the next payment end period.

The system defaults the payment date for the dividend as follows:

Dividend Payment Date = Last dividend processed date + Dividend payment frequency + Payment lag, if any.

You can override the defaulted date. If you do so, the date you specify must not be earlier than the application date.

Issue Date

Date, Mandatory

Enter the Date on which the Dividend Payment is to be issued. This date must be before or the same as the application date.

By default, the application date is displayed here.

Reference Number

20 Character Maximum, Alphanumeric, Mandatory

Enter the Reference Number for the dividend payment.

Remarks

Alphanumeric; Optional

You can specify any narrative for the dividend payment, as free format text, in this field.

Min. Amount for Payment

Numeric; Optional

Specify the minimum amount that can be paid out as dividend, through the dividend payment that you are processing. For a unit holder, if the dividend to be paid falls below this amount, it is distributed according to the Default Distribution Mode defined for the fund and the Income Distribution options (IDS) specified for the unit holder is ignored.

Covering Letter

OLE Object, Optional

To specify the covering letter template word document that is to be completed for the dividend, click the ‘Click here to download covering letter’ link, or click ‘Browse’ to locate the format on the local disk or network.

Bank Details for the Dividend Payment

The bank details are displayed by the system in this section, from the details of the fund account to which the dividend payment was made.

Account Name

Display Only

The name of the account, to which the proceeds due to dividend have been credited, for this fund, is displayed here. This will typically be the fund bank account.

Account Number

Display Only

The account number of the account, to which the proceeds due to dividend have been credited, for this Fund, is displayed here. This will typically be the fund bank account.

Account Currency

Display Only

The currency of the account, to which the proceeds due to dividend have been credited, for this Fund, is displayed here. This, typically, is the fund base currency.

Bank Name

Display Only

The name of the Bank through which the payment is done is displayed here.

2.8.2 Triggering Processing for Cash Dividends involving Payment

To trigger the processing of a cash dividend for which any part of the dividend is being distributed through payment,

 

2.8.3 Triggering Processing for Dividends involving Reinvestment

After the processing is complete, you must process the reinvestments for the dividend using the Process Reinvestment screen. You can access the Process Reinvestments screen from the Batch menu category of the Browser menu.

2.8.4 Triggering Dividend Processing for All Funds and Corporate Action types

In the Process Dividend Payment screen, you can trigger the dividend processing for all funds and corporate action types together.

2.9 Dividend Reinvestments

This section contains the following topics:

2.9.1 Processing Dividend Reinvestments

You can use this screen to trigger the processing of any reinvestment transactions resulting out of dividend processing, for both cash and stock dividends.

Invoke the ‘Process Dividend Reinvestments’ screen by typing ‘UTDPRRIN’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. The ‘Process Dividend Reinvestments’ screen is displayed. Select ‘New’ from the Actions menu in the Application tool bar or click new icon to enter the details of the dividend reinvestment to be processed.

When you open this screen, the funds and corporate action types for which reinvestments are due to be processed as on the application date are displayed.

The system defaults the Value Date for the reinvestment transactions as the application date, if there is no lag specified for reinvestments in the Corporate Action profile. If a lag is specified, then the Value Date is defaulted accordingly. You can override the defaulted date, if necessary.

 

You have the facility to change the reinvestment date to a previous date, called backdating. In the payment date field you have the option to specify the date, here you may enter a previously specified date, in case you receive a delayed instruction from the client on the reinvestment.

For example; A dividend period from 1st July to 31st July has the date of Dividend Payment processing as 15th August. You can change the date to the 1st of August, which is accepted by the system.

The following details are displayed for each reinvestment record:

To process the reinvestment,

To process all the records at the same time,

2.10 Dividends Reversal

This section contains the following topics:

2.10.1 Invoking the Mass Amendment Detail Screen

You may need to reverse a dividend that has been processed. Invoke the ‘Mass Amendment Detail’ screen by typing ‘UTDMASAM’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. The ‘Mass Amendment Detail’ screen is invoked. Select ‘New’ from the Actions menu in the Application tool bar or click new icon to enter the details of the dividend to be amended.

 

In this screen, you must specify the following details for the dividend you wish to reverse:

The system will display the following details:

Select the Reverse option in the Process field in this screen, to signify reversal.

The details of the last processed dividend for the selected fund are displayed in the list portion of the screen. If required, you can change the values for the ‘New EPU’ and the ‘New Equalization’ fields. Click ‘Ok’ button to execute the reversal.

The reversal of the dividend can be authorized by selecting the Authorize option in the Actions list.

After authorization, the reversal is processed by reversing the dividend and reinvestment entries passed, and posting the applicable adjustment entries.

The system will reverse the normal and negative stock dividends.

2.10.2 Reports for Reprocessing or Reversal of Dividends

On the day of execution of reprocessing of dividend, the system prints the Income Advice as part of the End of Day processes, displaying the results of the reprocessing.

The following details are displayed:

If a reversal has been executed, the Reversal Advice is also printed, containing negative values for all details, to indicate the reversal.

2.11 Dividend Reversal / Amendment for Selected Unit Holders

This section contains the following topics:

2.11.1 Invoking the Selected UH Detail Screen

When a dividend that has been processed is reversed through the Dividend Reversal/Reprocess screen, it is reversed for all unit holders for whom the dividend was processed.

If you require reversal of processed dividend for specific unit holders, you can perform the reversal through the Selected UH Dividend Reversal/Amendment screen.

Similarly, if amendment of processed dividend is required for specific unit holders, you can perform the amendment through the Selected UH Dividend Reversal/Amendment screen.

Invoke the ‘Selected UH Detail’ screen by typing ‘UTDSELUH’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. The ‘Selected UH Detail’ screen is invoked. Select ‘New’ from the Actions menu in the Application tool bar or click new icon to enter the details of the selected UH for whom the dividend to be amended or reversed.

 

In this screen, you can:

You can specify the following fields in this screen:

Operation

Alphanumeric; Mandatory

Select the operation that you wish to perform. The following operations can be performed through the screen:

Fund ID

Alphanumeric; Mandatory if ISIN Code is not entered

Select the ID of the fund for which the last processed dividend is being reversed / amended for the selected corporate action, for the specified unit holders.

To select the fund, you can either indicate the Fund ID or the ISIN Code of the fund. When you select the fund and the corporate action, the Payment Number and Dividend Reference Number of the last processed dividend are also displayed for the combination.

ISIN Code

Alphanumeric; Mandatory if Fund ID is not entered

Select the ISIN Code of the fund for which the last processed dividend is being reversed / amended for the selected corporate action, for the specified unit holders.

To select the fund, you can either indicate the Fund ID or the ISIN Code of the fund. When you select the fund and the corporate action, the Payment Number and Dividend Reference Number of the last processed dividend are also displayed for the combination.

Corporate Action Type

Alphanumeric; Mandatory

Select the corporate action for the selected fund that resulted in the dividend, which is being reversed / amended for the specified unit holders.

When you select the fund and the corporate action, the Payment Number and Dividend Reference Number of the last processed dividend are also displayed for the combination.

Payment Number

Choose the payment number generated by the system from the option list

Dividend Details Section

Fund ID

Select the Fund Id of the fund for which dividend has been processed

Payment Date

The date on which the payment has been processed is displayed.

Status

Choose the status of the dividend from the option list here.

Processed Type

The status of the reversal – whether processed or not – is displayed here.

Recalculate Freeze Holdings

Optional

You can use this field to indicate whether the freeze holdings calculation must be performed again for the amendment to the dividend to come into effect in respect of the selected unit holders. When you enter a reversal in this screen, recalculation of freeze holdings is performed by the system as a mandatory process, when the reversal is processed.

Check the box to indicate recalculation of freeze holdings.

Generate Reinvestments

Optional

You can use this field to indicate whether reinvestments resulting from the dividend amendment are to be generated when the amendment is processed, in respect of the selected unit holders. Check the box to indicate generation of reinvestments.

Reference Number

The reference number is defaulted by the system.

Unit Holder Details

Click the list box to select the specific unit holders for whom the reversal / amendment of dividend is to be applicable. The Unit Holder Selection screen is opened. In this screen, you can either specify the ID of the unit holder, or click on the Find link. After you have specified the unit holder number, click on Add. Each unit holder you select in this fashion is displayed in the text box. Click on Remove to remove a selected unit holder number from the list.

2.11.2 Amendment of Dividend Payments for Specific Unit Holders

In the Selected UH Dividend Reversal/Amendment screen, you can amend a dividend payment for specific unit holders as follows:

After an amendment of a processed dividend has been entered as described above, it must be authorized in order to come into effect.

 

2.11.3 Reversal of Dividend Payments for Specific Unit Holders

In the Selected UH Dividend Reversal/Amendment screen, you can reverse a dividend payment for specific unit holders as follows:

After a reversal of a processed dividend has been entered as described above, it must be authorized in order to come into effect.

2.11.4 Authorizing Dividend Reversal / Amendment

After a processed dividend has been reversed or amended for specific unit holders, the reversal or amendment must be authorized in order to come into effect. The authorization can be effected through the Selected UH Dividend Reversal/Amendment screen, as follows:

2.11.5 Processing of Dividend Reversals/Amendments

When a dividend reversal/amendment for specific unit holders is processed, the following operations are performed by the system:

2.12 Mass Reprocessing for Dividends

This section contains the following topics:

2.12.1 Invoking the Mass Reprocess Detail Screen

Oracle FLEXCUBE Investor Servicing provides you the facility of reprocessing multiple dividends for a combination of unitholder and fund. You can also specify the dividend that needs to be reprocessed.

To perform mass reprocessing, you can use the ‘Mass Reprocess Detail’ screen. You can invoke this screen by typing ‘UTDMASRE’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

 

To perform mass reprocessing for dividends in this screen,

You can specify the following fields in this screen

Fund ID

Alphanumeric; Mandatory if ISIN Code is not entered

Select the ID of the fund for which the dividend is being reprocessed for the selected corporate action, for the specified unit holder.

ISIN Code

Alphanumeric; Mandatory if Fund ID is not entered

Select the ISIN Code of the fund for which the last processed dividend is being reprocessed for the selected corporate action, for the specified unit holder.

Corporate Action Type

Alphanumeric; Mandatory

Select the corporate action for the selected fund that resulted in the dividend, which is being reprocessed for the specified unit holder.

UnitHolder ID

Alphanumeric; Mandatory

Select the ID of the unitholder for whom the dividend is being reprocessed for the selected corporate action, for the specified fund.

Payment From Date

Date Format, Optional

Specify the date from which dividend payments need to be re-processed. By default, the application date is displayed here. However, you can modify the defaulted date.

In case of dividend corrections due to reversal of a subscription in the past, you can specify the transaction date of the subscription. In case of dividend corrections due to inaccurate information at UH IDS level, you can specify the date for which changed UH IDS information should be effective.

Payment To Date

Date Format, Optional

You can specify Date up to which dividend payments need to be re-processed. By default, the application date is displayed here. However, you can modify the defaulted date.

In case of dividend corrections due to reversal of a subscription in the past, you can specify the system application date in this field. In case of dividend corrections due to inaccurate information at UH IDS level, you can specify the system application date in this field.

On clicking ‘Ok’ button, all dividend payments processed for the specified Unit holder Id and Fund Id combination in the given date range are displayed. Check the Select option associated with each record to select that record for reprocessing.

Recalculate Freeze Holdings

If you select ‘Yes’, then system will recalculate freeze holdings for all the records.

Generate Reinvestments

If you select ‘Yes’, then system will generate reinvestments for all the records.

Mass Reprocess Process

On authorization, system will identify all the dividend payments for the specified unitholder Id and Fund Id combination in the given date range. Dividend Reprocessing will happen sequentially in the order of payment numbers / payment dates. Once a dividend payment record is picked up for reprocessing, system will reprocess the dividend, reverse the reinvestment transactions generated during initial dividend processing and generate new dividend reinvestments and payments as the case may be.

If units associated with a particular reinvestment have already been aged out due to a redemption/switch out transaction, system will log an error and will not continue with reprocessing of UH dividend payments. However, the system will not rollback the reprocessing of payments, which is successfully processed prior to this record. Redemption transactions must be reversed and reprocessing must be restarted for the remaining unit holder dividend payments so that underlying reinvestments can be re-processed.

You can alternatively decide to halt the reprocessing due to dependent transactions and then delete the unprocessed/aborted UH dividend payment records using mass reprocessing screen. Once reprocessing is successfully completed, system will allocate the new reinvestment transactions generated. Since these new reinvestments will be allotted as of current reprocessing date, you can not select the freeze holdings method “Based on Allocation Date”.

In case an Unauthorized Mass Reprocess record exists for a Unitholder ID and Fund ID combination, then system will not allow amendment of dividend for that Fund through “Mass Amendment” and Unitholder ID- Fund combination through “Selected UH Amendment”. Also, you will not be allowed to authorize or edit a Mass reprocess record for the specific unitholder-Fund ID combination record through Select UH amendment screen.

 

2.13 Mock Processing for Dividends

This section contains the following topics:

2.13.1 Specifications for Mock Dividend Processing

Oracle FLEXCUBE Investor Servicing provides you the facility of ‘mock-processing’ dividends and obtaining projections of dividend payment.

Through mock processing, you can view the projected details of a dividend that has not been processed. You can also view the effect of changes in EPU or stock ratio in respect of a dividend that has been processed.

Note

Mock processing does not perform any actual dividend processing; the details obtained are projected details for viewing only and are not results of actual dividend processing. To perform actual dividend processing, follow the sequence of steps explained under the sec­tion The Process Dividend Payments screen, in this chapter.

To perform mock processing, invoke the ‘Mock Dividend Detail’ screen by typing ‘UTDMOCKD’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. Select ‘New’ from the Actions menu in the Application tool bar or click new icon to enter the details of the mock dividend being performed.

Reference Number for Dividend Mock Processing

For each dividend for which you perform mock processing in this screen, you must provide a unique identification reference number. You can execute the mock processing, and obtain projection reports based on the reference number.

Details for Dividend Mock Processing

Fund Identification and Corporate Action Type

When you select the fund for which you wish to mock-process a dividend, you must also specify the type of dividend for which mock processing is required, whether a cash dividend or a stock dividend.

Mock Processing for Processed Dividends

You must also specify whether the mock processing is for a dividend in respect of which payment has already been processed, or one for which it has not been processed. To mock process a dividend for which the payment has been processed, check the Project Amendment box. You must also specify the payment number of the dividend for which the changed values of EPU (or stock ratio) would apply, for the mock processing, in the FCIS Payment Number field.

FATCA WHT Amount

Optional

Select to deduct the FATCA WHT amount from the drop-down list. Following are the options available in the drop-down list:

Dividend Details

If Income Distribution Rules have been defined for the fund that you have selected, the following specifications for the dividend are defaulted and displayed:

If no Income Distribution Rules have been defined, you can make these specifications for the selected fund, for which you wish to mock process a dividend, in this screen.

For details about these specifications, refer to the chapter Setting up Fund Rules, in the

Fund Manager user manual.

You must also provide the following projected details to perform the mock processing, just as you would during normal dividend processing:

Note

If the fund is a dividend equalization fund, you can specify an ‘Equalization Rate’ that would be applied to the G2 units.

Refer the section ‘Maintaining G1-G2 conversion Details’ in this User Manual for more details on dividend equalization.

If you are maintaining the specifications for mock processing of a dividend that has already been processed, the exchange rate date, ex-distribution date, freeze holdings and dividend declare dates of the dividend payment number that you indicate, are defaulted.

To specify EPU in terms of components, check the EPU Based on Components box. You

can specify the EPU in terms of components in the Fund Dividend Component screen, just

as you would for a normal dividend. For details about these specifications, refer to the

section Fields in the Fund Dividend Maintenance screen, found earlier in this chapter.

Report Components

Component Id

Specify the id of the component.

Component value

Specify the value of the component.

NPI Component

Specify the NPI component

Report Components

Component ID

Specify the id of the component.

Component Value

Specify the value of the component.

You can also specify any EPU components that would be used for reporting purposes, by clicking on the Report Component Values link. The Reporting Components screen is displayed. The list of EPU reporting components is pre-shipped for your installation according to your requirements, and you can specify the EPU values for each reporting component.

Click ‘Ok’ button to save the mock-processing dividend record. You must have it authorized by a user with requisite authorization rights. After authorization, you can execute the mock processing in the Mock Dividend Processing screen.

2.14 Mock Dividend Summary Screen

This section contains the following topics:

2.14.1 Retrieving Record in Mock Dividend Summary Screen

You can retrieve a previously entered record in the Summary Screen, as follows:

Invoke the ‘Mock Dividend Summary’ screen by typing ‘UTSMOCKD’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button and specify any or all of the following details in the corresponding fields:

Click ‘Search’ button to view the records. All the records with the specified details are retrieved and displayed in the lower portion of the screen.

Note

You can also retrieve the individual record detail from the detail screen by querying in the following manner:

You can perform Edit, Delete, Amend, Authorize, Reverse, Confirm operations by selecting the operation from the Action list. You can also search a record by using a combination of % and alphanumeric value.

Example:

You can search the record for Fund ID by using the combination of % and alphanumeric value as follows:-

2.14.2 Editing Mock Dividend record

You can modify the details of Mock Dividend record that you have already entered into the system, provided it has not subsequently authorized. You can perform this operation as follows:

2.14.3 Viewing Mock Dividend record

To view a record that you have previously input, you must retrieve the same in the Mock Dividend Summary screen as follows:

2.14.4 Deleting Mock Dividend record

You can delete only unauthorized records in the system. To delete a record that you have previously entered:

2.14.5 Authorizing Mock Dividend record

An unauthorized Mock Dividend record must be authorized in the system for it to be processed. To authorize a record:

When a checker authorizes a record, details of validation, if any, that were overridden by the maker of the record during the Save operation are displayed. If any of these overrides results in an error, the checker must reject the record.

2.14.6 Amending Mock Dividend record

After a Mock Dividend record is authorized, it can be modified using the Unlock operation from the Action List. To make changes to a record after authorization:

2.14.7 Authorizing Amended Mock Dividend record

An amended Mock Dividend record must be authorized for the amendment to be made effective in the system. The authorization of amended records can be done only from Fund Manager Module and Agency Branch module.

The subsequent process of authorization is the same as that for normal transactions.

2.14.8 Copying the Attributes

If you want to create a new Mock Dividend record with the same attributes of an existing maintenance, you can copy the attributes of an existing Mock Dividend record to a new one.

To copy the attributes:

2.14.9 Executing Mock Processing for Dividend

After a mock dividend record has been authorized, you can execute the process in the ‘Mock Dividend’ screen. Invoke this screen by typing ‘UTDMCKDV’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

Specify the reference number of the mock dividend you wish to process, and click the ‘Ok’ button.

2.14.10 Obtaining Reports for Mock Dividend Processing

To obtain the details of projected dividend as a result of mock processing, use the Mock Dividend Report screen. You can invoke ‘Mock Dividend Projection’ screen by typing ‘UTR00178’ in the field at the top right corner of the Application tool bar and click the adjoining arrow. The screen is displayed below:

 

You must specify the reference number of the mock dividend for which you need to obtain the report, and click ‘Ok’ button.

The following details are displayed for mock processing of dividend that has not been processed:

The following details are displayed for mock processing of dividend that has been processed and for which new values have been specified for EPU:

2.15 Mock Processing for Accumulation

This section contains the following topics:

2.15.1 Specifications for Mock Accumulation

When a dividend is declared for a fund, the AMC typically informs investors about the dividend distribution, through the Income Advice, which would contain the distribution details for each investor, based on the Income Distribution Setup defined for the investor.

When dividend declaration for the fund is not envisaged, the AMC would inform the investors about the projected income distribution through an accumulation report.

Just as you would simulate and mock process a dividend for a fund, you could also mock process income distribution accumulation details in respect of a fund, to obtain the projections. You process a mock accumulation in the same manner as you would a mock dividend:

Make specifications for the mock accumulation, in the Mock Dividend (detail) screen

  1. Make Have the mock accumulation authorized by a user with requisite rights in the Mock Dividend (summary) screen
  2. Execute the mock accumulation through the Mock Dividend Processing screen

Note

Mock processing does not perform any actual accumulation processing; the details ob­tained are projected details for viewing only and are not results of actual accumulation pro­cessing.

The specifications that you could indicate in the Mock Dividend (detail) screen for accumulation are similar to those you would make for mock dividend processing, except that you must select ‘Accumulation’ in the Projection Type field.

 

2.15.2 Obtaining Reports for Mock Accumulation Processing

To obtain the details of projected accumulation as a result of mock processing, use the Mock Dividend Report screen. You can invoke ‘Accumulation Details’ screen by typing ‘UTR00177’ in the field at the top right corner of the Application tool bar and click the adjoining arrow. The screen is displayed below:

 

You must specify ‘Accumulation’ as the projection type, and the reference number of the mock accumulation for which you need to obtain the report, and click ‘Run Report’ button.

The following details are displayed in the Accumulation Report, for each investor in the selected fund, as on the date of mock processing:

2.16 Mock Processing for Reversal of Accumulation

This section contains the following topics:

2.16.1 Specifications for Mock Processing of Reversal of Accumulation

You can obtain projected details of a reversal of accumulation that has been mock processed, if necessary. A reversal would mean a rollback of the accumulation projection details.

The sequence of steps to be followed for mock processing of reversal of accumulation are the same as for mock processing of accumulation, mentioned earlier.

Note

Mock processing does not perform any actual reversal of accumulation processing; the de­tails obtained are projected details for viewing only and are not results of actual reversal of accumulation processing.

In the Mock Dividend (detail) screen, select ‘Reversal of Accumulation’ in the Projection Type field, and specify a unique reference number for the mock reversal of accumulation.

Specify the reference number of the mock accumulation process that you wish to reverse, in the Old Reference Number field.

 

You can specify the following fields in this screen:

As mentioned under the section that explains the specifications for mock dividend, some of the entries to some fields in the Mock Dividend (detail) screen are defaulted from the Income Distribution fund rule.

For more information, refer the chapter ‘Setting up Fund Rules’, in the Fund Manager user

manual.

Also, some of the specifications are the same as those made for actual dividend processing in the Fund Dividend Maintenance screen.

For more information, refer the section on the Fund Dividend Maintenance screen, in this

chapter, for these details.

Only those fields related to mock processing are listed in this section.

Projection Type

Indicate the business action for which you want to perform mock processing – dividend processing, accumulation processing or reversal of accumulation processing.

Reference Number

16 Characters Maximum; Alphanumeric; Mandatory

Specify a unique identifier for the mock processing record that you are setting up in this screen. You can execute the mock processing, obtain projection reports and perform all subsequent operations based on the reference number.

Old Reference Number

16 Characters Maximum; Alphanumeric; Mandatory

In the case of reversal of accumulation, specify the reference number of the accumulation that was mock processed, for which you wish to perform the mock reversal.

Project Amendment

Check this box to indicate that you are maintaining the specifications for mock processing of a dividend that has already been processed. You must specify the payment number of the dividend, in the FCIS Payment Number field.

2.16.2 Obtaining Reports for Mock Reversal of Accumulation Processing

To obtain the details of projected reversal of accumulation as a result of mock processing, use the ‘Accumulation Details’ Report screen. You can invoke this screen by typing ‘UTR00177’ in the field at the top right corner of the Application tool bar and click the adjoining arrow. The screen is displayed below:

 

You must specify ‘Reversal of Accumulation’ as the projection type, and the reference number of the mock reversal of accumulation for which you need to obtain the report, and click ‘Run Report’ button.

The following details are displayed in the Accumulation Reversal Report, for each investor in the selected fund, as on the date of mock processing:

2.17 G1-G2 Conversion Details

This section contains the following topics:

2.17.1 Maintaining G1-G2 Conversion Details

A fund typically consists of units which have received some benefit (income or dividend benefits) and units which have not received any so far. The former are termed G1 units and the latter G2 units. The G1 units could consist of units for which dividend has been declared at least once. The G2 units could be as a result of switch-in, reinvestment or subscription transactions.

Since the dividend distribution rates for G1 and G2 are different, the system will determine the number of units for each group in the fund as on the ‘Freeze Holding Date/ Effective Date’ and pay out the dividend accordingly. The units are converted or adjusted against a transaction for the Unit Holder and Fund combination. The adjusted units are then considered for freeze holding. Additionally, where dividend equalization is applicable, the system will pay out an equalization amount only for the G2 units. The following transactions are made available as part of conversion:

Transaction Type

G1 or G2 Units available for transaction

Subscription (Initial and Subsequent)

G2 Units until and including the next Freeze Holding Date

IPO Subscription (subscription during Fund Launch)

G1 Units

Pseudo Switch-Subscription

G2 Units until and including the next Freeze Holding Date

COB transfer-in

G2 Units until and including the next Freeze Holding Date

Normal transfer-in (Non COB)

G1 or G2 or combination of G1 and G2 Units

Merger/Conversions

G1 or G2 units in proportion

Switch In

G2

If you wish to enter additional adjustments for the number of G1 and G2 units that a Unitholder holds in a fund, you can do so in the ‘Dividend Equalization Adjustment’ screen. The system will factor the conversions maintained here while computing the total G1 and G2 units for the Unitholder. You can invoke the ‘Dividend Equalization Adjustment’ screen by typing ‘UTDDIVEQ’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

You can specify the following details here

Unit Holder ID

Alphanumeric; Mandatory

Specify the ID of the unit holder for which you wish to maintain G1-G2 conversions. You can also select the ID from the adjoining option list. The list contains all unit holder IDs maintained in the system.

Unit Holder Name

Display

The system displays the name of the unit holder based on your choice of the Unitholder ID.

Fund ID

Alphanumeric; Mandatory

Specify the Fund ID. You can also select the ID from the adjoining option list. The list contains all Fund IDs maintained in the system.

Transaction Number

Alphanumeric; Mandatory; 50 Characters

Select the transaction number for the Unit Holder and Fund ID combination, from the adjoining option list.

G1 Unit

Alphanumeric; Mandatory; 255 Characters

Specify the G1 unit for adjustment. These units are converted against a transaction for the UH-Fund Combination.

Total Units

Display

The system displays the total transaction units against the transaction number selected earlier.

Outstanding Units

Display

The system displays the available units as on the application date.

Fund Identification Number

Display

The system displays the fund identification number based on your choice of the Fund ID.

Effective Date

Date Format; Mandatory

Specify the date on which the conversions should be considered.The effective date entered is considered to be equal to the transaction date of the selected transaction.

G2 Units

Numeric; Mandatory

Enter the number of G2 units that should be converted to G1 units or vice versa.

For instance, if a Unit holder UH1 has 300 G1 units and 500 G2 units as determined by the system based on the ‘Units for Freeze Holding’ preference. If you specify 100 units for adjustment, the system will convert 100 G1 units to G2 units during freeze holding (G1 units – 200, G2 units – 600). If you maintain it as -100, then 100 units will be reduced from G2 and added to G1 upon freeze holding (G1 units 400, G2 units 400).

Note

The amount received by each unit holder on the basis of their G1 and G2 units will be cal­culated as shown below:

Gross Income = ((Total unit balance* Gross Group 1 rate)- (Group 2 units * Equalization rate/(1-std tax rate)))

Tax deducted =Gross income * tax applied

Net Income = Gross Income-Tax deducted

Equalization amount = Group 2 units * equalization rate

Total Payment = Net Income + Equalization Amount

The unit conversion is effective from the authorization of the record. On conversion, a reference number is generated and is available in the audit trail.

2.18 Dividend Equalization Adjustment Summary Screen

This section contains the following topics:

2.18.1 Retrieving Record in Dividend Equalization Adjustment Summary Screen

You can retrieve a previously entered record in the Summary Screen, as follows:

Invoke the ‘Dividend Equalization Adjustment Summary’ screen by typing by typing ‘UTSDIVEQ’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button and specify any or all of the following details in the corresponding fields:

Click ‘Search’ button to view the records. All the records with the specified details are retrieved and displayed in the lower portion of the screen.

Note

You can also retrieve the individual record detail from the detail screen by querying in the following manner:

You can perform Edit, Delete, Amend, Authorize, Reverse, Confirm operations by selecting the operation from the Action list. You can also search a record by using a combination of % and alphanumeric value.

Example:

You can search the record for Fund ID by using the combination of % and alphanumeric value as follows:-

2.18.2 Editing Dividend Equalization Adjustment record

You can modify the details of Dividend Equalization Adjustment record that you have already entered into the system, provided it has not subsequently authorized. You can perform this operation as follows:

2.18.3 Viewing Dividend Equalization Adjustment record

To view a record that you have previously input, you must retrieve the same in the Dividend Equalization Adjustment Summary screen as follows:

2.18.4 Deleting Dividend Equalization Adjustment record

You can delete only unauthorized records in the system. To delete a record that you have previously entered:

2.18.5 Authorizing Dividend Equalization Adjustment record

An unauthorized Dividend Equalization Adjustment record must be authorized in the system for it to be processed. To authorize a record:

When a checker authorizes a record, details of validation, if any, that were overridden by the maker of the record during the Save operation are displayed. If any of these overrides results in an error, the checker must reject the record.

2.18.6 Amending Dividend Equalization Adjustment record

After a Dividend Equalization Adjustment record is authorized, it can be modified using the Unlock operation from the Action List. To make changes to a record after authorization:

2.18.7 Authorizing Amended Dividend Equalization Adjustment record

An amended Dividend Equalization Adjustment record must be authorized for the amendment to be made effective in the system. The authorization of amended records can be done only from Fund Manager Module and Agency Branch module.

The subsequent process of authorization is the same as that for normal transactions.

2.18.8 Copying the Attributes

If you want to create a new Dividend Equalization Adjustment record with the same attributes of an existing maintenance, you can copy the attributes of an existing Dividend Equalization Adjustment record to a new one.

To copy the attributes:

2.19 Checks and Pay-in Slips

This section contains the following topics:

2.19.1 Printing Checks and Pay-in Slips

After a corporate action dividend of any type is declared and authorized in the system, you can initiate the printing of dividend checks. You can also print covering letters for the dividend.

When a redemption transaction in the system has been allocated, you can also initiate the printing of the check for the redemption payout. Also, you can initiate printing checks for payment of fees or incentives that would be levied.

You can also print pay-in slips containing details of payment made towards subscription or IPO transactions, to be sent to appropriate collection centers.

2.19.2 Check Printing Screen

To initiate the printing of checks for any of these payments, use the ‘Cheque Printing’ screen. You can invoke this screen by typing ‘UTDCHKPR’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

To recall, you must perform the data extraction for any kind of payment instrument or pay-in slip in the Data Extraction screen before you attempt to actually print the instrument in this screen.

Duplicate Cheque

Optional

Select this box to indicate that you are printing a duplicate check. The Duplicate Printing screen is displayed. You must specify the Cheque Status as Duplicate, and the number of the original check.

Type of Check

Alphanumeric, Mandatory

Select the type of payment for which you wish to print a check, from the list. In this screen, you can print checks for any of the following types of payment:

Output Type

Alphanumeric; Mandatory for redemption, fee / incentive or dividend payments

Specify the mode in which the payment instrument will be made available to the unit holder.

If the zip code of the unit holder receiving payment is serviced by the local default bank maintained for the AMC, transaction type, payment mode and fund ID combination, and the payment amount does not exceed the limit amount for the bank, the payment can be made by check to the local default bank. Specify ‘check’ in this field. If the payment amount exceeds the limit amount for the default bank, specify ‘demand draft’ in this field.

If the zip code of the unit holder receiving payment is not serviced by the local default bank, but by a correspondent bank maintained for the AMC, transaction type, payment mode and fund ID combination, and the payment amount does not exceed the limit amount for the correspondent bank, the payment can be made by check to the correspondent bank. Specify ‘check’ in this field. If the payment amount exceeds the limit amount for the correspondent bank, specify ‘demand draft’ in this field.

If the zip code of the unit holder receiving payment is not serviced by the local default bank, or by a correspondent bank maintained for the AMC, transaction type, payment mode and fund ID combination, you will need to specify the bank to which the payment must be made. Specify ‘outstation check’ in this field.

This field is not applicable for pay-in slips.

Printing Option

Alphanumeric, Mandatory

Select the mode that you wish to use to print the check for the selected payment type. The following modes are available:

Fund ID

6 Character Maximum, Alphanumeric, Mandatory

Select the Fund ID, for which the cheque is being printed, from the list provided.. When you specify the ID of the fund, the ISIN Code of the fund is displayed in the ISIN Code field.

Amount Range From and To

Numeric, Optional

Specify the amount range within which payment checks are to be processed, for the selected fund and check type.

Display Records for Selecting

Optional

Select this box to indicate that the check information records extracted for printing must be displayed, so as to enable selection of checks. If you select this option, the extracted information is displayed in the grid portion of the screen.

The Subscription Details Section

Transaction Number

16 Characters Maximum, Alphanumeric; Optional

Specify the unique number assigned to the subscription or IPO transaction, for which you are generating a pay-in slip in this screen.

Unit Holder ID

12 Characters Maximum, Alphanumeric, Optional

Specify the ID of the unit holder involved in the subscription or IPO transaction, for which you are generating a pay-in slip in this screen.

Collection Center Bank Name

60 Character Maximum; Alphanumeric; Optional

Specify the name of the collection center bank to which the payments would be deposited, through the pay-in slip being generated.

Collection Center Branch Name

60 Character Maximum; Alphanumeric; Optional

Specify the name of the branch of the collection center bank to which the payments would be deposited, through the pay-in slip being generated.

Pay-in Number

12 Characters Maximum, Numeric, Running Serial Number

The system generates a unique pay-in number for each pay-in slip that you print for a transaction or a set of transactions. Therefore, when you are printing the pay-in slip for a transaction or a set of transactions for the first time, this field is not available for data entry. If you are retrieving the record of a slip that has already been printed, you can specify the pay-in number in this field as search criteria.

The pay-in number generated for a pay-in slip for a single transaction or a set of transactions is unique. It can be generated for a transaction or a set of transactions included in printing a pay-in slip only once. Subsequently, you can print the pay-in slip again, as a duplicate copy.

The pay-in number is a number comprising 12 numerals. The first six numerals represent the date of printing of the pay-in slip, and the remaining six numerals represent a running serial number. For instance, the pay-in number 060602000001 represents the first pay-in slip printed on 6th June 2002.

Mode of Payment

Alphanumeric; Optional

Specify the mode of payment (or sub payment mode) specified for the transaction for which a pay-in slip is being generated. If the pay-in slip is being generated for a set of transactions with different modes of payment, you can choose ‘All Modes’ in this field.

Check Printing Information section

Sort Order

Alphanumeric, Mandatory

Select the parameter according to which the extracted check information must be sorted, in the displayed list.

The options available are:

Cheque Date

Date Format, Mandatory

Specify the date of issue that is to be printed on the checks that you have selected for printing.

Bank Name

20 Character Maximum, Alphanumeric, Mandatory for redemption, dividend and fee /

incentive instruments

If the payment is being made by check or demand draft to the local default bank maintained for the AMC, transaction type, payment mode and fund ID combination involved in the transaction, the default bank is displayed here. You can change it if necessary, and specify any of the other banks maintained for the combination.

If the payment is being made by check or demand draft to any of the correspondent banks maintained for the AMC, transaction type, payment mode and fund ID combination involved in the transaction, the correspondent bank is displayed here. You can change it if necessary, and specify any of the other correspondent banks maintained for the combination.

If the payment is being made by an outstation check, specify the name of the bank, through which the payment is to be directed.

Branch Name

20 Character Maximum, Alphanumeric, Mandatory for redemption, dividend and fee /

incentive instruments

If the payment is being made by check or demand draft to the local default bank branch maintained for the AMC, transaction type, payment mode and fund ID combination involved in the transaction, the default branch is displayed here. You can change it if necessary, and specify any of the other branches maintained for the combination.

If the payment is being made by check or demand draft to any of the correspondent bank branches maintained for the AMC, transaction type, payment mode and fund ID combination involved in the transaction, the correspondent bank branch is displayed here. You can change it if necessary, and specify any of the other correspondent bank branches maintained for the combination.

If the payment is being made by an outstation check, specify the name of the branch of the bank, through which the payment is to be directed.

Commission

Numeric; Optional

For outstation checks, you can mention the relevant commission amount

Type of Dividend Check

Mandatory only for dividend payments

Select the dividend payment document that you wish to print. You can choose:

2.19.3 Extracting Data for Printing

To print checks for dividend, redemption or fee / incentive payments, or pay-in slips, you must first extract the necessary information for printing, from the system database.

For check printing on any given application date, you need to extract the following payment information from the database:

For printing pay-in slips for payments made towards subscription or IPO transactions, you must extract details of all transactions in all funds for which a payment has been received, as on the application date.

You can use the ‘Data Extraction’ screen to extract the payment information. You can invoke this screen by typing ‘UTDDTEXT’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

The ‘Data Extraction’ screen is displayed. Select ‘New’ from the Actions menu in the Application tool bar or click new icon to trigger the data extraction process..

 

2.19.3.1 Data Extraction for Pay-in Slips

The extraction of data for the generation of pay-in slips on a given date retrieves all transactions in a fund, (subscriptions or IPO) for which a payment has been received from the unit holder, as on the given date.

2.19.3.2 Data Extraction for Redemption, Fee / Incentive or Dividend Payments

The extraction of date for redemption transactions, fees / incentives, or dividend payments in the Data Extraction screen extracts all transactions in respect of which a redemption or dividend payment, or fee / incentive payment has been received on the given date, for the fund.

Note

You must perform the data extraction for any kind of payment check or pay-in slip before you attempt to actually print the instrument.

For details about the AGY Bank Branch Details screen, refer the chapter ‘Maintaining Reference Information’ in Reference Information User Manual.

2.19.4 Printing Redemption, Dividend or Fee / Incentive instruments

To print redemption, dividend or fee / incentive checks in the Check Printing screen, specify the following information:

After you have specified this information, click ‘Ok’ button. If you have selected the ‘Display Records for Selecting’ box, all the transactions in respect of which the instruments are to be printed, are displayed in the lower Display section of the screen.

 

The Check Printing Information section is also displayed, where you can indicate your sorting specifications, for selecting the instruments to be printed.

In this section, you specify the following sorting information:

Type of Transaction

Optional

Select the type of transaction from the adjoining drop-down list. Following are the options available:

The parameters according to which the transactions retrieved by the search function must be sorted.

The date to be printed on the payment instrument.

For online printing, the starting instrument number.

The transactions are now displayed, sorted according to your sorting options.

For dividend checks, the following information is displayed:

For redemption or fee / incentive checks, the following information is displayed:

The Payout Bank details

The default bank accounts to which the payment will be directed, is sorted based on the zip code in the address details of the unit holders cashing the payment, and is extracted from the AGY Bank Branch Details maintenance.

The sorting of payment collection details is based on the following parameters:

These parameters are extracted from the AMC Bank Branch Details maintenance.

You can change the payout bank account details, and specify any of the other banks maintained in the AGY Bank Branch Details for the AMC, redemption or dividend payments, and fund ID combination. Select from the drop down list.

For outstation checks, you can also specify the relevant commission amount.

After specifying your sort options, select the transaction in respect of which you want to print the payment instrument, and click the Print button to trigger printing.

2.19.5 Printing Pay-in Slips

To print pay-in slips for inflow transactions in respect of which payment has been received from unit holders, specify the following information in the Check Printing screen:

You can specify any or all of the following details to display details for pay-in slips, in the Subscription Details section:

The payment for more than one transaction can be deposited through the pay-in slip. You can, for instance, specify the collection centre details for all transactions in respect of which payment is being deposited through the pay-in slip.

After you have specified the search information mentioned above, click ‘Ok’ button. Select the ‘Display Records for Selecting’ box, all the transactions in respect of which the pay-in slips are to be printed, are displayed in the lower Display section of the screen.

The following pay-in details are displayed, for each transaction:

Note

If no collection center details have been defined for the AMC, transaction type, payment /sub payment mode and fund ID combination, you can extract the data for pay-in slips through the Data Extraction screen, but you cannot print any pay-in slips in the Check Printing screen.

You can change the pay-in collection center, and specify any of the other banks maintained in the AGY Bank Branch Details for the AMC, subscription (or IPO) transactions, and fund ID combination. Select from the drop down list.

Select the transaction in respect of which you want to print the pay-in slip, and click the Print button to trigger printing.

You can automate the cheque printing process through the scheduler. To do this, you can invoke the Job Set Up screen and maintain a job for cheques to be printed automatically, post EOD.

For further details on the scheduler, refer the chapter titled Interfaces with External Systems under Interfaces module.

2.19.6 Retrieving Transaction Information for Printing

2.19.6.1 Selecting Type of Check to be Printed

You can use the Check Printing screen to print checks for any of the following types of payments:

When you print dividend checks, you can print the following documents too:

You can also use the Check Printing screen to print pay-in slips containing details of payments made towards subscriptions and IPO transactions.

2.19.6.2 Specifying Output Type

You must select the type of instrument that must be printed for the payment, which will be given to the unit holder as an encashable instrument.

For payment amounts that fall below than the limit amount for the default payment bank or correspondent bank (as applicable), you can select the instrument type as ‘Check’. For payment amounts that are greater than the limit amount for the default payment bank or correspondent bank (as applicable), you can select the instrument type as ‘Demand Draft’. For unit holders that cannot be serviced through either the default payment bank or the correspondent banks, you can select the instrument type as ‘Outstation Check’.

The output type is not applicable for pay-in slips.

2.19.6.3 Specifying Amount Range

You can specify an amount range within which the check amounts must be found, during printing. Use the From and To Amount Range fields to specify an amount range. Only those amounts that fall within the specified amount range will be printed.

2.19.6.4 Setting Your Check Printing Options

In the Check Printing screen, you can select the printing options that suit your requirement, in the Printing Options field. Accordingly, you can:

Online Printing

When you choose to print checks online, you must specify the number of the first check to be printed, as the start number for printing.

Offline Printing

If you choose to print checks offline, you need not specify start check number. The system spools all checks that are in a range of serial numbers, into a spool file. Serial numbers are internal tags or identifications for the checks. Each check number is associated with a serial number. At a later juncture, you can print the actual checks using the spooled file. You must upload the numbers of the actual checks into the system after printing, so that the serial numbers and the check numbers may be matched.

Spooling to a hand-off file

If checks are to be printed by an external check-printing agency, you must spool the check information to a hand-off file, either an ASCII text file or an Excel worksheet. You must provide a serial number range for the checks. As with offline printing, you must upload the numbers of the actual checks into the system after they are printed by the external agency, so that the serial numbers and the check numbers may be matched.

2.19.6.5 Printing Duplicate Checks

You can print duplicate payment checks for a dividend, redemption or fee / incentive payment, if deemed necessary, in the Check Printing screen.

Select the Duplicate Check box, to indicate that you choose to print duplicate checks. The Duplicate Printing popup screen is displayed. You must specify the status of the check as Duplicate, and also specify the original check number.

2.19.6.6 Specifying Transaction Number for Pay-In Slips

To print a pay-in slip for a single subscription or IPO transaction, you can specify the number of the transaction.

2.19.6.7 Specifying Unit Holder ID for Pay-In Slips

To print a pay-in slip for all subscription or IPO transactions of a specific unit holder, you can specify the ID of the unit holder.

2.19.6.8 Specifying Collection Center Details for Pay-In Slips

To print all pay-in slips that will be paid to the collection account of a specific collection center bank, specify the name of the bank and the branch. You can print duplicate pay-in slips or pay-slips for offline spooled pay-in numbers in this way.

2.19.6.9 Specifying Payment Mode

To print pay-in slips for all subscription or IPO transactions with a specific mode of payment, specify the mode of payment as search criteria.

2.19.6.10 Pay-in Number for Pay-In Slips

The system generates a unique pay-in number for each pay-in slip that you print for a transaction or a set of transactions. If you are retrieving the record of a slip that has already been printed, you can specify the pay-in number as search criteria.

The pay-in number generated for a pay-in slip for a single transaction or a set of transactions is unique. It can be generated for a transaction or a set of transactions included in printing a pay-in slip only once. Subsequently, you can print the pay-in slip again, as a duplicate copy.

The pay-in number is a number comprising 12 numerals. The first six numerals represent the date of printing of the pay-in slip, and the remaining six numerals represent a running serial number. For instance, the pay-in number 060602000001 represents the first pay-in slip printed on 6th June 2002.

2.19.7 Sorting Options for Payment Instruments

2.19.7.1 Sorting Extracted Check Information

In the extracted information list, you can sort the checks you want to print as follows:

You can select the required sort option in the Sort Order field, in the Check Printing Information section.

2.19.7.2 Specifying Starting Check Number

If you choose to print the checks online, you must specify a starting number for the checks.

For offline printing or spooling, the system will spool data with serial numbers for the checks, which can be assigned to the check numbers at a later juncture.

In the case of spooling, when the checks are printed by an external agency, the numbers of the printed checks must be uploaded back into the system so that they can be tracked.

2.19.7.3 Specifying Check Date

You can specify the date of issue that is to be printed on the checks, in the Check Date field.

2.19.7.4 Payment Bank Details

After you have specified the sort options for the checks, the system displays the payment bank details. The bank to which the payment will be directed, from which the unit holder would cash the payment instrument, is the payment bank. The system displays the payment bank details from the AGY Bank Branch Details maintenance, for the AMC, transaction type, payment / sub payment mode and fund ID combination involved in the transaction.

You can alter the payment bank displayed by the system, and specify the appropriate bank details, by choosing from the list.

The example given below explains how the drawee bank account is reckoned:

Example

Your AMC, which is based in London, directs all redemption and dividend payments to local unit holders to your payment account at Fina Bank, London. For unit holders of your AMC in Sheffield, Leeds and Birmingham, you maintain correspondent account relationships with Fina Bank’s branches in each of these cities, for the purpose of directing redemption and dividend payments. For each branch, an amount limit is maintained.

Therefore, in the AGY Bank Branch Details maintenance, the following details are maintained for your AMC, for redemption and dividend payments to unit holders in the Citadel Growth Fund:

For your AMC,

Payment Mode

Payment Bank

Local Default Bank?

Correspondent Bank?

Limit Amount (GBP)

Check

Fina Bank, Lon­don

Yes

No

10000

Check

Fina Bank, Shef­field

No

Yes

5000

Check

Fina Bank, Leeds

No

Yes

5000

Check

Fina Bank, Bir­mingham

No

Yes

5000

Further, the zip codes serviced by each branch of Fina Bank are as follows:

Branch

Zip Codes Serviced

Fina Bank, London

330456, 330457, 330459

Fina Bank, Sheffield

440100, 440200, 440300

Fina Bank, Leeds

300323, 300423, 300523

Fina Bank, Birmingham

500111, 500222, 500333

On the 24th of January 2002, you need to make redemption payments to your unit holders, as shown below.

The details of the bank account to which the payment will be directed, and the payment instrument, is also shown:

Unit Holder

Zip Code

Payment Amount (GBP)

Instrument

Payment Bank

Mr. Edwin Saun­ders

330456

5000

Check

Fina Bank, Lon­don

Ms. Alice Howard

330456

15000

Demand Draft

Fina Bank London

Mr. Walter Ward

440300

2500

Check

Fina Bank, Shef­field

Ms. Cheryl Warren

300323

6000

Demand Draft

Fina Bank, Leeds

Ms. Karen Taylor

700190

2500

 

In the case of Mr. Edwin Saunders, the payment is directed to the local default bank, Fina Bank, London, and since the Zip Code is serviced by that branch. Also, the payment amount falls well below the limit amount for that branch, and therefore, a check payment may be made.

In the case of Ms. Cheryl Warren, the payment is directed to the correspondent bank, Fina Bank, Leeds, and since the Zip Code is only serviced by that branch, and not by the default bank. Also, the payment amount exceeds the limit amount for that branch, and therefore, a demand draft payment must be made.

In the case of Ms. Karen Taylor, the Zip Code is not serviced by the local default branch or the correspondent branches. Therefore, the payment is not directed to any of the branches, and will be made through an outstation check.

2.20 Check Updation

This section contains the following topics:

2.20.1 Invoking the Update Dividend Check Screen

You can monitor as well as update the status of checks issued for dividend payments as well as redemption and fee / incentive payments in the system. Use the ‘Update Cheque Status’ screen to do this.

You can invoke this screen by typing ‘UTDUPCHQ’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. The screen is displayed. Select ‘New’ from the Actions menu in the Application tool bar or click new icon to enter the details of the cheque whose status you are updating.

You can specify the following fields in this screen:

Fund ID

6 Character Maximum, Alphanumeric, Mandatory

Select the Fund ID, for which the cheque is being printed, from the list provided.. When you specify the ID of the fund, the ISIN Code of the fund is displayed in the ISIN Code field.

ISIN Code

12 Characters Maximum; Alphanumeric; Mandatory

Select the ISIN Code of the fund for which you want to process payments, from the options provided. If you specify the ISIN Code of a fund, the ID of the fund is displayed in the Fund field.

Update Cheque Status Details Section

Unit Holder ID

12 Character Maximum, Alphanumeric, Display

The ID of the Unit Holder, whose check details are to be retrieved based on the selection criteria, is displayed.

Check Currency

Display Only

The currency in which the specified check amount is to be reckoned is displayed here. This is typically the fund account currency.

Check Amount

Display Only

The amount of the check is displayed here. This amount is reckoned in the fund account currency

Serial Number

Numeric, Display

This is the Serial Number of the check for a particular Unit Holder.

Select the status of the check. You can choose from any of the following statuses:

Payment Number

The Payment Number of the dividend for which the payment check was issued will be displayed.