8. Setting up Loads

This chapter contains the following sections:

8.1 Loads

This section contains the following topics:

8.1.1 Types of Loads

When an investor transacts in an AMC, the AMC may charge the investor a certain fee for any or all of the transactions requested. On the other hand, the AMC may give the investor an incentive for reasons of continued loyalty, or for initial investment. These fees or incentives are identified as loads.

A load involves payment by one entity to another. Any entity that makes the payment is known as the “From” entity, and any entity that receives such payment is known as the “To” entity. Accordingly, there are two basic types of loads, from which all other loads derive:

For instance, an AMC may stipulate that for the first 10 investors that invest in a newly floated fund, a differential favorable price would be applied. This is an incentive.

The recipient (or the “To” entity) of an incentive could be a unit holder, a broker or another entity.

A broker may also be required to pay a fee to the AMC for services rendered, such as commission processing and payment, reinvestment processing and so on. If the unit holder is not any of the involved parties then that load is a commission. (that is, the “From” or “To” entities are not unit holders).

8.1.2 Parameters that form Basis for Applying Load

Fees, incentives and commissions may be based on many different parameters, or combinations of these parameters, depending upon the requirements of the AMC.

While transacting, the AMC may attach loads to any transaction, be it a fee, incentive or a commission, which may be computed and applied on the basis of any of the following parameters:

Date

For instance, for any transaction request that is accepted on a certain date or a certain period bounded by any two dates, an incentive may be applied on the amount of the transaction, as follows:

Consider a slab as follows:

Slab

From Date

To Date

Return Value

0-10000

15-10-2000

15-12-2000

5%

Here the slab value may be reckoned as an amount or a number of units.

This means that for all transactions requested after 15-10-2000 and before 15-12-2000, for a volume that lies within the slab, the percentage of the load (incentive) applied is 5%. In such a case, for a transaction coming in on 15-10-2000, if the transaction amount is 5000 Rand, then the investor would be given an incentive amounting to an additional 250 Rand (5/100 * 5000) worth of units in the fund.

In the same case, if the load were a fee, then the investor would be given only 4750 Rand {5000 - (5/100 * 5000)} worth of units in the fund.

Generally, this is an early bird incentive in case of an IPO or subscription transaction period.

A load can also be applied based on a certain number of days, months or years that the unit holder remains in the fund. For instance,

Load Period Return Value

L45 45 days 5%

L4M 4 months 4%

L1Y 1 year 3%

Let us suppose that a certain unit holder has entered into transactions with the AMC in the following manner:

Transaction Reference Number

Transaction Type

Transaction Amount

Transaction Date

T1

Subscription

1000

3-1-2001

T2

Subscription

2000

3-4-2001

T3

Redemption

3000

3-7-2001

For the redemption transaction on 3-7-2001, the load based on period is explained below. The load for this transaction is based on the period that has elapsed between the original subscription transaction and the redemption transaction through which the units resulting from the original transaction are redeemed.

Note

The three loads in this example are to be reckoned as separate loads. A single load can­not have slabs based on all three parameters - days, months and years.

Load applied based on the subscription transaction T1:

The number of days between the transaction T1 and T3 = Difference in days between 3-7-2001 and 3-1-2001 = 180 days. This period falls in the slab for load L1Y, above, and the load applied will be 3% of the transaction amount:

Load = 3/100 * 3000 = 90

Load applied based on the subscription transaction T2:

The number of days between the transaction T2 and T3 = Difference in days between 3-7-2001 and 3-4-2001 = 90 days. This period falls in the slab for load L4M, above, and the load applied will be 4% of the transaction amount:

Load = 4/100 * 3000 = 120

Therefore, the total load amount applied for the redemption transaction T3 is 90+120 = 210.

Note

Both the loads applied as shown in the example above are based on periods, and also on the original subscription transaction(s) that have generated the units being redeemed, in a subsequent redemption transaction. These loads have no other basis than these two factors. Since they are based on the period for which the unit holder has continued with the fund, they are known as aging loads.

Loading based on aging policy

In the example given above, the units value considered for the redemption transaction T3 could also be dependent on the aging policy designated for the fund. If the aging policy is designated to be FIFO (first-in, first-out), the aging would apply as follows:

Out of the 3000 units being redeemed, 1000 units would be aged to 180 days (as corresponding to the first subscription transaction T1).

Therefore, the load for the redemption of these 1000 units would be calculated as follows:

3/100 * 1000 = 30

The remaining 2000 units would be aged to 90 days (as corresponding to the first subscription transaction T2).

Therefore, the load for the redemption of these 2000 units would be calculated as follows:

4/100 * 2000 = 80

Therefore, the total loading for T3, with an ageing policy of FIFO, would be 30+80 = 110.

Amount

For each amount slab, the AMC could charge a fee. This would be an amount-based load.

Units

Similarly, as with amount-based loads, the AMC could charge a fee for each slab of units.

Date and Amount

The fee charged could also be operable within a date range, and an amount range.

Period and Amount

The fee could be charged on each amount slab based on a certain number of days, months or years that the unit holder remains in the fund.

Note

If the lower boundary is to be inclusive, then a transaction value of 1000 currency units would be reckoned as falling in the slab 002 for any of the loads. If not, as in this case, then the transaction value of 1000 currency units would be reckoned as falling in the slab 001 for any of the loads.

Let us suppose that a certain unit holder has entered into transactions with the AMC in the following manner:

Transaction Reference Number

Transaction Type

Total Transaction Amount

Transaction Date

T1

Subscription

1000

3-1-2001

T2

Subscription

2000

3-4-2001

T3

Redemption

3000

3-7-2001

For the redemption transaction on 3-7-2001, the load based on period and amount is explained below, assuming that the ageing policy for the fund is designated to be FIFO (first-in, first-out). The load for this transaction is based on the period that has elapsed between the original subscription transaction and the redemption transaction through which the units resulting from the original transaction are redeemed. It also takes into account the amount being redeemed.

Load applied based on the subscription transaction T1:

The number of days between the transaction T1 and T3 = Difference in days between 3-7-2001 and 3-1-2001 = 180 days. This period falls in the period slab for load L1Y, above, and the number of units falls in the units slab 001 for L1Y. The return value for the load applied will be 75 currency units.

Load applied based on the subscription transaction T2:

The number of days between the transaction T2 and T3 = Difference in days between 3-7-2001 and 3-4-2001 = 90 days. This period falls in the period slab for load L4M, above, and the number of units falls in the units slab 002 for L1Y. The return value for the load applied will be 100 currency units.

Therefore, the total load amount applied for the redemption transaction T3 is 75+100 = 175 currency units.

Note

Both the loads applied as shown in the example above are based on periods and amounts, and also on the original subscription transaction(s) that have generated the units being re­deemed, in a subsequent redemption transaction. These loads have no other basis than these two factors. Consequently, they are known as aging loads.

Date and Units

The fee charged could also be operable within a date range, and a units range.

Period and Units

A load can also be applied based on a certain number of days, months or years that the unit holder remains in the fund. For instance,

Load

Period

Slab

From Units

To Units

Return Value

Lower Boundary Inclusive

L45

45 days

001

0

1000

5%

No

 

 

002

1000

2000

4%

No

L4M

4 months

001

0

1000

4%

No

 

 

002

1000

2000

3%

No

L1Y

1 year

001

0

1000

3%

No

 

 

002

1000

2000

2%

No

Let us suppose that a certain unit holder has entered into transactions with the AMC in the following manner:

Transaction Reference Number

Transaction Type

Transaction Amount

Transaction Date

T1

Subscription

1000

3-1-2001

T2

Subscription

2000

3-4-2001

T3

Redemption

3000

3-7-2001

For the redemption transaction on 3-7-2001, the load based on period is explained below. The load for this transaction is based on the period that has elapsed between the original subscription transaction and the redemption transaction through which the units resulting from the original transaction are redeemed.

Load applied based on the subscription transaction T1:

The number of days between the transaction T1 and T3 = Difference in days between 3-7-2001 and 3-1-2001 = 180 days. This period falls in the slab for load L1Y, above, and the load applied will be 3% of the transaction amount:

Load = 3/100 * 3000 = 90

(Here again, if the aging policy is FIFO, only 1000 units would be aged, and the load would be 3/100 * 1000 = 30)

Load applied based on the subscription transaction T2:

The number of days between the transaction T2 and T3 = Difference in days between 3-7-2001 and 3-4-2001 = 90 days. This period falls in the slab for load L4M, above, and the load applied will be 4% of the transaction amount:

Load = 4/100 * 3000 = 120

(Here again, if the aging policy is FIFO, only 2000 units would be aged, and the load would be 4/100 * 2000 = 80)

Therefore, the total load amount applied for the redemption transaction T3 is 90+120 = 210.

If the aging policy is FIFO, the total load amount would be 30 + 80 = 110.

Note

Both the loads applied as shown in the example above are based on periods, and also on the original subscription transaction(s) that have generated the units being redeemed, in a subsequent redemption transaction. These loads have no other basis than these two factors. Since they are based on the period for which the unit holder has continued with the fund, they are known as aging loads.

Loading based on aging date

Ageing for period based loads is calculated based on the ageing date specified at the time of setting up a fund. It can be the dealing date, transaction date or the confirmation date. Period is calculated using the following formula:

Period = Transaction/Dealing date/Price date of the redemption Link transaction date of the corresponding subscription transaction.

Here, the link transaction date of the subscription is the date of inflow for the redemption.

8.1.3 Setting up Loads in System

The Oracle FLEXCUBE Investor Servicing system provides the facility of setting up the pattern according to which you can process loads.

To configure the system to process a load, you must:

Refer the chapters on Setting up Funds and Authorization, respectively, in this user manual for more information on the Fund Load Setup screen and the authorization of a fund.

Note

8.2 Load Maintenance Screen

This section contains the following topics

8.2.1 Creating Load

To create a load in the system, use the ‘Load Maintenance Detail’ screen. You can invoke this screen by typing ‘UTDLOADM’ 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 load details.

In this screen, you create a load as follows:

In each of the screens, you must save your changes. The system closes the screen and returns you to the main Load Definition screen, where you must save the load record again.

Note

When you create a load for the first time in this screen, it is advisable that you set up any criteria-based loads, derived loads or basis loads simultaneously.

After a load is authorized, no changes are possible to the load details, i.e., you cannot subsequently set up derived, basis or criteria-based loads, if it has been already mapped to a fund or a group.

You can specify the following information in this screen:

Basic Information Section

Load ID

5 Characters Maximum, Numeric, Mandatory

Specify a unique alphanumeric identifier for the load. Do not specify the ID of an existing load here.

Consider as Lower Boundary?

Optional

Select yes to indicate that a slab basis value (either amount or units or period or date) that is a boundary value separating slabs, must be considered as the lower boundary of a slab.

Cumulative Loads

Optional

Select yes to indicate that the load is cumulative in nature. If you check this box, it will be applied based on the static options set up for processing cumulative loads for the AMC. This type of a load is applicable for funds for which the Rights of Accumulation (ROA) facility is applicable.

Load Type

1 Character Maximum, Alphabetic, Mandatory

Indicate whether the load is to be applied and processed as a fee or an incentive, by choosing the appropriate value from the list.

Amount or Percentage

1 Character Maximum, Alphabetic, Mandatory

Indicate whether the return value for the load is a flat Amount or a Percentage of the Base Price/Transaction Amount, by choosing the appropriate value from the list.

Amount Basis

Alphanumeric; Optional

You can use this field to indicate whether the load return value is to be applied on the fund capital. This specification is applicable only for Loaded to Price (LTP) loads. Select the Gross option to indicate that the load return value is to be applied on the fund capital. If not, select the Net option.

Description

60 Character Maximum, Alphanumeric, Mandatory

Enter some descriptive or narrative text, qualifying the load. It should describe the purpose for which the load has been set.

Price Basis Load

Optional

You can use this field to indicate whether the load being defined is a price basis load, that is, whether the load could be an inherent fee or incentive in respect of fund prices for which price bases other than the NAV and Transaction Base Price components are used.

Note

Any loads that have been defined as price basis loads are only used as the indicator for computing load values, and are not picked up during evaluation of criteria. That is, the oth­er load details specified for such loads, such as the return value, slabs and so on, are not taken into consideration. The difference between the Transaction Base Price and the Price Basis defined for the transaction is considered as an inherent fee or incentive, during allocation.

For instance, if the Price Basis for a transaction is ‘Offer Price’, and Transaction Base Price is 1.009 and the Offer Price is 1.060, the difference (1.06-1.009 = 0.051, without currency rounding) is considered as the inherent fee (since the TBP is less than the offer price). If the offer price were less than the TBP, the difference between the two is considered an inherent incentive.

ROA Threshold for Initial Fee

Optional

Specify a threshold for initial fees for ROA based loads. The system compares the value specified with the cumulative AUM of the client to determine what a client should be charged by way of initial fees.

If the cumulative AUM exceeds the threshold value maintained, the system considers the Cumulative AUM for load slab pick up basis.

If the cumulative AUM is lower than the Threshold value maintained, the system considers the transaction value for load slab pick up basis.

Slab Mode Section

Mode

Mandatory

Indicate the parameter, upon which basis the slabs for the load will be defined.

A load can be defined based on:

Period Basis

1 Character Maximum, Alphabetic, Mandatory

Indicate the basis upon which the period specified for period-based loads must be interpreted, by choosing the appropriate option from the list. The options are Days, Months and Years.

This information is mandatory for slab modes based on Period, Period and Amount or Period and Units.

Load Calculation Method

1 Character Maximum, Alphabetic, Mandatory

From the list, select the option that indicates the method by which the load must be computed. The following methods of calculation are available:

UH Deal Maintainable

Optional

Check this box to indicate whether maintaining any deal based on the load would be permitted for unit holders.

Refer the chapter Managing Investor Accounts in the Agency Branch User Manual for more

information on deals for unit holder.

8.2.1.1 Tables Referred Section

You can define a single criterion for a single load. Criteria can be based on any one of the ten parameters given under the Tables Referred section. They can be any of the following - Agent, Broker, Fund, Investor, Payment Mode, Investor Fund, Investor Transaction, UH Additional Info, Transaction Rule, Transaction Detail, Agency Branch, Account Officer or IFA. Agency Branch, Account Officer and IFA options are applicable only for trailer commissions.

8.2.1.2 Criteria Section

Click ‘Criteria’ button to specify criteria for criteria-based loads. The Query Builder is opened, and you can specify the required criteria.

The criteria could be based on the parameters given. Choose one from the list box and select an Operator like (=, >, <) and enter the value you want to assign. The system will validate the specified criteria and the load will be applied only on successful validation of the same.

8.2.1.3 Load Details Section

After you have set up the basic parameters for a load in the main Load Definition screen, you must set up the details of any applicable slabs and any criteria for the load, before you actually save the load into the system database.

To do so, scroll down to the Load Details section at the lowest portion of the Load Maintenance screen. Here, you can specify the following information for each slab that you want to define for the load:

For loads with the Slab Mode ‘Date’, ‘Date and Amount’, or ‘Date and Units’

 

For loads with the Slab Mode ‘Period’, ‘Period and Amount’, or ‘Period and Units’

 

Slab Sequence No

System Generated

This number is generated by the system for each slab in the order of entry of the slab details. The sequence number begins with 1. You can set up multiple slabs for every load.

From Date

Date Format, Mandatory only for date-based loads

For date-based loads (i.e., the slab mode you selected for the load in the main Load Definition screen is either Date, Date and Amount or Date and Units), specify the date on and following which the slab is applicable.

Any transaction date higher than this date is reckoned as part of the slab.

If you have designated the lower boundary as inclusive the load by checking the Consider as Lower Boundary check box in the main Load Definition screen, then any transaction date that is equal to the date you specified here is also reckoned as part of the slab.

To Date

Date Format, Optional

For date-based loads (i.e., the slab mode you selected for the load in the main Load Definition screen is either Date, Date and Amount or Date and Units), specify the date up to which the slab is applicable.

Specifying the To Date is optional. If not specified, the system defaults the same, based on the system High Date Value maintained in the Defaults Maintenance.

From Amount

Numeric, Mandatory for all loads with Slab Mode as Amount, Date and Amount or Period

and Amount only.

Specify the lower amount boundary for the slab. Any amount higher than this amount is reckoned as part of the slab.

If you have designated the lower boundary as inclusive the load by checking the Consider as Lower Boundary check box in the main Load Definition screen, then any transaction amount that is equal to the amount you specified here is also reckoned as part of the slab.

To Amount

Numeric, Optional.

Specify the upper amount boundary for the slab. Any amount lower than this amount is reckoned as part of the slab.

Specifying the To Amount is optional. If not specified, the system defaults the same, based on the system High Amount Value maintained in the Defaults Maintenance.

From Units

Numeric, Mandatory for all loads with Slab Mode as Units, Date and Units or Period and

Units only.

Specify the lower units boundary for the slab. Any number of units higher than this value is reckoned as part of the slab.

If you have designated the lower boundary as inclusive the load by checking the Consider as Lower Boundary check box in the main Load Definition screen, then a number of units applied that is equal to the value you specified here is also reckoned as part of the slab.

To Units

Numeric, Optional.

Specify the upper units boundary for the slab. Any number of units lower than this value is reckoned as part of the slab.

Specifying the To Units is optional. If not specified, the system defaults the same, based on the system High Units Value maintained in the Defaults Maintenance.

From Period

Numeric, Mandatory only for period-based loads

For period-based loads (that is, the slab mode you selected for the load in the main Load Definition screen is either Period, Period and Amount or Period and Units), specify the beginning of the period in which the slab is applicable.

Any period higher than this is reckoned as part of the slab.

If you have designated the lower boundary as inclusive the load by checking the Consider as Lower Boundary check box in the main Load Definition screen, then any period that is equal to this specified here is also reckoned as part of the slab.

The period you specify here will be interpreted by the basis you have specified in the Period Basis field in the main Load Definition screen. For instance, if you enter a value ‘1’, then it will be deemed as 1 day of the period basis is ‘Days’, 1 month if the period basis is ‘Months’ and 1 year if the period basis is ‘Years’.

To Period

Numeric, Optional

For period-based loads (i.e., the slab mode you selected for the load in the main Load Definition screen is either Period, Period and Amount or Period and Units), specify the end of the period in which the slab is applicable.

The period you specify here will be interpreted by the basis you have specified in the Period Basis field in the main Load Definition screen. For instance, if you enter a value ‘1’, then it will be deemed as 1 day of the period basis is ‘Days’, 1 month if the period basis is ‘Months’ and 1 year if the period basis is ‘Years’.

Specifying the To Period is optional. If not specified, the system defaults the same, based on the system High Period Value maintained in the Defaults Maintenance.

Return Value

Numeric, Mandatory

Enter the load value applicable for the slab. This is the value that will be applied if the load is applicable for any transaction.

If the return value is indicated to be a percentage of the base price / transaction amount then the value entered should not be greater than one hundred percent.

Floor Value

Numeric, Optional

Specify the minimum amount that must be paid for this load. If the computation of the load returns a value that is lower than this figure, then the applicable load considered is this figure.

Ceiling Value

Numeric, Optional

Specify the maximum amount that must be paid for this load. If the computation of the load returns a value that is higher than this figure, then the applicable load considered is this figure.

UH Deal Ceiling Value

Numeric, Optional

You can specify the UH deal ceiling value either in terms of amount or in terms of percentage.

Refer to the section “Arriving at the Load Return Value and Load Amounts” in the chapter

‘The Allocation Process’ in Volume IV of Fund Manager User Manual for details.

8.2.2 Derived Loads

A load can be defined not only on the basis of the parameters, but also ‘deriving’ from (or dependant on) another load. Such loads are termed as derived loads.

In a typical AMC scenario, for example, the charges that are collected from an investor could constitute the parent load and the particulars, that are dependent on the initial collected charges, could be the derived loads. These could comprise broker charges, VAT component, and so on.

In the Oracle FLEXCUBE Investor Servicing system, you can define loads based on other loads. This means that you can map any load that you set up to a parent load. A tree - structure with multiple levels is therefore possible for loads. The lowest level loads are called Parent Loads, and all other loads will be defined as loads that are dependent on these loads. The loads that are dependent are called derived loads.

Derived loads could also be defined to effect fee and commission sharing between a Distributor and the other intermediaries in the hierarchy, for a transaction.

8.2.3 Derived Button

After you have created a load in the Load Definition screen, you can create a derived load that is dependent on the main load.

To do so, click ‘Derived’ button. The ‘Derived Load Set Up’ screen displays, and you can set up the derived load in this screen.

The following fields are available for data entry in the Derived Load Set Up screen:

Load ID

Display Only

The ID of the Load to which the derived load that is being set up should be mapped, is displayed here, from the Load Definition screen. This is the parent load.

Derived Load Section

In this section, you may specify the parameters for a new derived load. Once you tab out of the last field in the row, (i.e. the Criteria field), the record is saved automatically.

Load ID

6 Characters Maximum, Alphanumeric, Mandatory

Specify a unique alphanumeric identifier for the derived load. This ID must not be the ID of a load already existing in the system database.

Load Description

60 Characters Maximum, Alphanumeric, Mandatory

Enter some descriptive or narrative text, qualifying the derived load. It should describe the purpose for which the load has been set.

To Entity Type

1 Character Maximum, Alphanumeric, Mandatory

From the list, select the type of entity that will be the recipient of the derived load. The load setup must be applicable for the entity type you select in this field.

To Entity ID

12 Characters Maximum, Alphanumeric, Optional

Specify the ID of the entity to which this load is payable. This must be the ID of a valid entity in the system, and the load setup must be applicable for this entity type.

Cap to Parent Load Amount

Select Yes to indicate that the derived load amount is to be capped to the parent load amount. If selected as Yes then the sum of derived load amounts cannot be greater than the parent load amount. If not, the net derived amount can be negative (that is, the resultant front end load for a particular entity could be negative).

This specification is used for derived loads that are set up for the purpose of fee/commission sharing between the AMC and the Distributors.

Amount Basis

Alphanumeric; Optional

In this field, you can indicate whether the derived load is a percentage of the parent load amount, or whether it is derived based on the transaction amount. Select either Gross or Net to indicate that the derived load is to be derived based on the transaction amount; leave this field blank to indicate that the derived load is a percentage of the parent load amount.

This specification is used for derived loads that are set up for the purpose of fee/ commission sharing between the AMC and the Distributors.

Return Percentage

5 Characters Maximum, Numeric, including a maximum of 2 decimal places, Mandatory

Enter the load percentage that is applicable for this derived load. This value must be greater than zero and less than one hundred.

Mandatory

Optional

Select Yes to indicate that the derived load is to be processed as a mandatory load. If you select No then the derived load is deemed to be an optional load.

A mandatory derived load will be applied (or processed) based on the criteria setup for this load.

An optional derived load will be applied based on the priority you assign to it, depending upon the priority number you specify in the Priority No. field in this screen.

Priority No.

Numeric, Mandatory for optional derived loads.

Specify the priority number that will indicate the priority of application for the derived load.

Criteria

Optional

Specify any criteria that determine how this load is to be applied.

To specify the criteria, click the Criteria link. The Query Builder is opened and you can specify an SQL statement, by the directives of which the load will be processed.

Tables Referred Window

The derived load that you have created may be referring many tables in the system. As you specify the details in the criteria Query Builder, the check boxes corresponding to each of the tables referred are checked in the main screen, in this window.

FDAP Income

Mandatory

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

8.2.4 Basis Button

The basis of application of a load is not restricted only to the following parameters:

A load may also be applied based on any other parameter that can be defined as a basis. Such a definition is called a basis definition and the load defined on such a basis is called a basis load.

The following example will make this clear:

Basis definitions are usually defined based on a number of holdings units, or a period of time, in days.

In Oracle FLEXCUBE Investor Servicing, you can create a basis definition for any load, through the Basis Definition screen, after you have created a load in the Load Definition screen.

To do so, click ‘Basis’ button. The Basis Load screen is opened, and you can set up the basis load in this screen.

Note

Basis Information

Load ID

6 Characters Maximum, Alphanumeric, Mandatory

The ID of the load that you specified in the Load Definition screen, for which you are creating a basis definition, is displayed here.

Load Type

Display Only

The type of the load for which you are creating a basis definition is displayed here, from the Load Definition screen.

Basis Criteria

In this section, you can set up the criteria that will characterize this basis definition. Depending upon whether the basis is reckoned on a number of units or a number of days click the Criteria link and then use the Query Builder to make your specification. To do so, click the Criteria link. The Query Builder is opened.

The criteria that you set up through the Query Builder must return a single value. Once you have saved your specification and closed the Query Builder, the SQL statement corresponding to the desired criteria appears in the Criteria box, and the tables that have been referred in the execution of the criteria are clicked in the Tables Referred Box.

Take Current Transaction into Account

1 Character Maximum, Boolean, Optional

Check this box to indicate the basis definition you are making in this record must take any current transactions into account while computing the return values. By default, this box is not checked.

Tables Referred Section

Display Only

After you have saved your criteria specification in the Query Builder, and closed the same, the SQL statement corresponding to the desired criteria appears in the Criteria box, and the tables that have been referred in the execution of the criteria are clicked in this Box.

Criteria can be based on any one of the eight parameters given under the Tables Referred section. They can be any of the following - Ageing, LOI, Group Benefits, Fund Price Header, Unit Holder Additional Info, Unit Holder Fund Units, Unit Holder Fund Amount, and Investor.

8.3 Load Maintenance Summary Screen

This section contains the following topics:

8.3.1 Invoking the Load Maintenance Summary Screen

After you have set up a load, you must have another user authorize it so that it would be effective in the system.

Before the load is authorized, you can edit it as many times as necessary. You can also delete a load before it is authorized.

After authorization, you can only make changes to a load (or any components such as derived or basis loads) through an amendment.

The ‘Load Maintenance Summary’ screen can be used for the following operations on loads:

You can invoke the ‘Load Maintenance Summary’ screen by typing ‘UTSLOADM’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

8.3.2 Retrieving Load

To retrieve a previously entered load:

Note

You can also retrieve an individual Load ID from the Detail screen by doing query in the following manner:-

You can perform Edit, Delete, Amend, Authorize, Reverse, Confirm operation by selecting from the Action list.

You can also search the record by using combination of % and alphanumeric value.

Example

You can search the record for Load ID/Description code by using the combination of % and alphanumeric value.

8.3.3 Editing Load Maintenance Details

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

8.3.4 Viewing Load Maintenance Details

To view the load maintenance details that you have previously entered:

8.3.5 Deleting Loads

You can delete only unauthorized loads in the system. To delete a load:

8.3.6 Authorizing Loads

When a load is authorized, any derived or basis loads that have been created for the load are also authorized in the database, simultaneously.

After a load is authorized, you can designate that it must be applicable either to a single fund or a group of funds (a load group). You can indicate this mapping in the Fund Load Setup screen (for a single fund) or the Group Load Mapping screen (for a load group)

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

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

8.3.7 Amending Loads

After a load is authorized, it can be modified using the Unlock operation from Action list. To make changes to an after authorization, you must invoke the Unlock operation which is termed as Amend Operation. If a load is attached to a fund, then the system will not allow amendment of load details.

8.3.8 Authorizing Amended Loads

After a load is authorized in the Load Authorization screen, you can make changes to any of the details of the load, provided the authorized load has not already been designated as applicable for a fund or load group.

If the load has already been mapped to a fund or a load group in the Fund Load Setup screen or the Group Load Mapping screen, you cannot amend the load.

Provided amendment is possible for the load, you can modify the slab details, any derived or basis loads. If there are no derived loads or basis loads created for the load, you can set up these during amendment.

When you amend an authorized load (provided editing is possible), the changes you make will be saved as unauthorized changes in the database. You must subsequently authorize the record of the load again, so that the changes are effected as authorized in the database.

An amended load must be authorized for the amendment to be made effective in the system. The process of authorization is the same as that of normal authorization process.

8.3.9 Copying Attributes

If you want to create a load having the same attributes of an existing load, you can copy the attributes of an existing load to a new load.

To copy the attributes:

8.3.10 Maintaining Fees Applicable on Periodic Basis

Some fees or incentives are periodic in nature, that is, they may not be processed each time a transaction is requested or allocated, but they are paid on a periodic basis.

For instance, trailing commission paid to brokers is typically applicable over a period, irrespective of whether any transactions have been entered. Similarly, a management fee charged by an AMC can be applicable on a monthly basis, or a any other frequency, irrespective of whether any transactions have occurred or not.

8.4 Trailing Fees

A trailing fee is defined as the commission or incentive that is paid, normally by the fund, to unit holders, brokers, agents, agency branches, account officer or IFA for the continued loyalty of the unit holders to the fund. Here the term loyalty refers to the fact that unit holders who are allocated units hold them for a certain minimum period of time, which in turn results in the fund manager being able to project cash flows and investments with a greater degree of accuracy.

The fee is calculated based on the holdings of the investor, using any of the following methods:

A minimum period can also be set, for which the balances must be held, before a trailing fee can be applied.

FCIS provides the facility to compute trailer commission at any level i.e. Agent, Agency Branch, Account officer or IFA. The commission sharing will be applicable below the level at which trailer commission is computed. For instance, if trailer commission is computed at Agency branch level, commission sharing on flat percentage will be applicable to all levels below agency branch.

8.5 Payment Groups

This section contains the following topics

8.5.1 Maintaining Payment Groups

To support different trailing fee rate across the different groups, you can maintain payment groups for the unit holder / agent / agency branch separately using ‘Payment Group Maintenance’ screen. You can invoke this screen by typing ‘UTDPAYGP’ in the field at the top right corner of the Application tool bar and click the adjoining arrow. The screen is displayed below:

In this screen you can maintain the following details:

Payment Group Code

Mandatory

Specify the code to identify the payment group.

Payment Group Description

Optional

Specify the description of the payment group.

8.5.2 Entity Information Tab

Entity Type

Mandatory

Specify the type of entity. You can also select the entity type from the option list provided. The list consists of all the valid and authorized entities type. You can also link multiple entities of same type to the payment group. However, if a entity is already mapped to a payment group, then you cannot map it again to a different payment group.

Entity ID

Mandatory

Specify the type of entity ID. You can also select the ID from the option list provided. The list consists of all the valid and authorized entities.

Entity Name

Display

Base on the ID selected, the name of the entity is displayed.

8.5.3 Bank Details Tab

Click the ‘Bank Details’ tab to specify the bank details for the payment group.

You can maintain the following in this screen:

Bank

Mandatory

Specify the name of the bank for receiving the payment. You can also select the bank from the option list provided. The list consists of all the valid bank names maintained in the system.

Branch

Mandatory

Specify the branch of the bank. You can also select the branch name from the option list provided. The list consists of all the valid bank branches maintained in the system.

Account Type

Mandatory

Specify the type of account. You can also select the account type from the option list provided. The list consists of all the valid and authorized account types maintained in the system.

Account Type Description

Display

Account description is displayed based on the account type selected.

Account Number

Mandatory

Specify the account for receiving the payment.

IBAN

36 Characters Only; Alphanumeric; Optional

Specify the IBAN of the account holder.

Account Name

Mandatory

Specify the name of the account holder.

Account Currency

Mandatory

Specify the account currency. You can also select the currency from the option list provided. The list consists of all the valid and authorized currencies maintained in the system.

Default

Mandatory

Select ‘Yes’ option to set this bank account as the default account to receive the payments. You shall set at least one account as default for each of the currency.

Direct Debit Allowed

Optional

Select ‘Yes’ option to debit the account directly.

Click the ‘Bank Details’ button in the ‘Payment Group Maintenance’ screen to maintain the additional bank details. The screen is displayed below:

In this screen, you can maintain the following details:

SWIFT Format

Optional

Select the SWIFT format from the drop-down list for receiving the payments. The drop-down list consists of the following SWIFT message formats:

Bank Charged

Optional

Select the bank to be charged. Select any of the following options:

Beneficiary

Optional

Specify the beneficiary of the payment group.

Beneficiary BIC Code

Optional

Specify the BIC of the beneficiary.

Beneficiary Address

Optional

Specify the beneficiary address.

Beneficiary Acct No

Optional

Specify the beneficiary account number.

Beneficiary Code

Optional

Specify the beneficiary code.

Beneficiary Info

Optional

Specify any other information of the beneficiary.

Intermediary

Optional

Specify the intermediary of the payment group.

Intermediary BIC Code

Optional

Specify the BIC of the intermediary.

Intermediary Address

Optional

Specify the intermediary address.

Intermediary Acct No

Optional

Specify the intermediary account number.

Intermediary Code

Optional

Specify the intermediary code.

Intermediary Info

Optional

Specify any other information of the intermediary.

Further Credit Name

Optional

Enter further credit name.

Further Credit Acct No

Optional

Enter further credit account number.

Reference1 and Reference2

Optional

Specify the reference for the account holder.

Note

The detail maintained through ‘Payment Group Maintenance’ screen does not have any processing impact on trailing commission and this is just an informative maintenance.

8.5.4 Ongoing Management Fees

Ongoing management fees are levied by an AMC as payment for maintenance services rendered to unit holders.

In the Periodic Load Details screen, management fee loads are always set up at a fund group level, and are applied based on the Assets Under Management (AUM), in respect of all the funds in the fund group.

The load computation method (Nature of Load) for management fee loads can either be Simple Slab or Weighted Average. Management fee loads can only be set in the Periodic Load Details screen if the trailer commission computation method is Average Daily Balance and daily accrual frequency.

Distribution of commission below the level set in Periodic load should be through entity commission sharing. For instance, if the Periodic load setup is at Agency branch level, then for commission distribution to Account Officer and IFA, commission sharing should be setup.

8.6 Periodic Load Screen

This section contains the following topics

8.6.1 Maintaining Periodic Loads

The system facilitates the processing of trailing fees or management fees payable from any entity in the system to another entity. This trailing fee is set up in the system as a load in the Loads Maintenance. The Periodic Load Setup screen facilitates the mapping of the trailing fee (load) to a fund, and setting up the following details regarding the fee:

You can invoke the ‘Periodic Load Maintenance Detail’ by typing ‘UTDPERLM’ 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 periodic load details.

Before you set up the details for a ‘trailing fee’ load or periodic load, and apply it to a fund, it is desirable to ensure that the following information is already set up in the system:

Setting up Trailing Fee

A trailing fee / management fee is usually computed as a percentage of the holdings of the investor, based on the method of computation specified for the fee.

The fee can be set up to apply to the holdings of an investor in:

To set up the trailing fee in the Periodic Load Setup screen, proceed as follows:

You can specify the following fields in this screen:

Periodic Load Section

Fund/Product/Group

Mandatory

You can use this field to indicate whether the periodic fee is being set up to be applicable for a fund, a product or a group.

ISIN Code

Specify the ISIN Code for the periodic fee.

Fund ID / Product ID / Group ID

Alphanumeric, Mandatory

Select the fund, product or group that the trailing fee must be associated with, from the drop-down list. When you have selected the fund, product or group, all periodic loads that are already associated to the selected fund, product or group are displayed in the grid portion of the screen.

Product Description

Display only

The system displays description for the specified product based on the details maintained for at ‘Product Fund Maintenance’ level.

Group Description

Display only

The system displays description for the specified group based on the details maintained for at ‘Payment Group Maintenance’ level.

Fund Name

Display only

The system displays description for the specified fund based on the details maintained for at ‘Fund Maintenance’ level.

Rule Effective From and To Dates

Date, Mandatory

By specifying the two dates, indicate the period in respect of which the trailing fee computation must be arrived at.

Load Section

Load ID

Alphanumeric, Mandatory

Select the load that represents the trailing fee / management fee that is to be associated and processed for the fund, product or group, from the drop-down list.

Load Description

Display Only

The system displays description for the specified load based on the details maintained at ‘Load Maintenance’ level.

Management Fee Load ID

AlphaNumeric, Optional

Management fee loads are always set up at a fund group level, and are applied based on the Assets Under Management (AUM), in respect of all the funds in the fund group.

Management fee loads are set up with the Average Daily Balance computation method, with Accrual Frequency as Daily, and can only be set when the periodic load setup is at a group level.

The load computation method (Nature of Load) for management fee loads can either be Simple Slab or Weighted Average.

From and To Entity Types

Alphanumeric, Mandatory

Select the two entities that are to be payees or recipients of the trailing fee.

The ‘From’ entities could be any of the following:

The ‘To’ entities could be any of the following:

From and To Entity Type Description

Display only

The system displays description for the entity types maintained as From and To Entity IDs respectively, based on the details maintained at ‘Entity Maintenance’ level.

Nature of Load

Alphanumeric, Mandatory

Specify the method of computation to be used for the trailing fee represented by the selected load. This could be any of the following options:

Nature of Load ‘TCQ’ (Quarterly Average holdings method) is supported only when client country AOSTRAILCOMM is turned on. ‘TCQ’ is supported only for broker set up.

Nature of Load Description

Alphanumeric; Optional

Specify description for the method you need to use for the computation of trailing fee represented by the selected load.

Action for Load

Alphanumeric, Mandatory

Select the event at which the fee would be applied and computed. The possible options are:

Note

If you select the option ‘Adjust UH Balance’, it is mandatory that you select the option ‘Unit Holder’ against the field ‘To Entity Type’ or ‘From Entity Type’.

Note

If you select the option ‘Adjust and Pay Broker’, it is mandatory that you select the option ‘Broker’ against the field ‘To Entity Type’.

Action Name

Alphanumeric; Optional

Specify description for the event at which you need to apply and compute the field.

Intermediary

Alphanumeric; Optional

In this field, you can indicate whether the periodic fee payment is to be made to the intermediary of the transaction that resulted in the periodic fee or to the default intermediary specified for the unit holder involved in the transaction that resulted in the periodic fee.

If you are setting up periodic load for Agent, Agency Branch, Account officer or IFA, the Intermediary should be set to either 'Hierarchy' or 'Transaction'. If the Intermediary is set to 'Hierarchy', the commission will be processed to the Default entities maintained at SLA. If the Intermediary is set to 'Transaction', the commission will be processed to the entities maintained at the Transaction level.

In case of CIF Merger/ Hierarchy merger, Trailer commission will be processed to the respective entities till the merger and from the date of merger, the same is processed to the new entities.

Intermediary Details

Alphanumeric; Optional

Specify description of the intermediary to which you need to pay the periodic fee.

Last Processed Date

Display only

This indicates the date when the last payment was made.

First Load to be Computed

Select the first load to be computed from AUM. Following are the options available in the drop-down list:

By default, First Load to be Computed is Trailer Fee.

Netted AUM for Second Load

Select if second load has to be computed on netted AUM. Following are the options available in the drop-down list:

If First Load to be Computed is Management Fee then while calculating Trailer Fee , system reduces the AUM by the Management Fee accrual amount and calculate Trailer Fee accrual.

Load Details Section

Processing Frequency

Alphanumeric, Mandatory

Specify the frequency at which the load that represents the trailing fee must be computed in the system. The system will then automatically compute the trailing commission as part of End of Day Processing based on this frequency, and a report will be generated.

By default, for daily accrual frequencies, the monthly accrual frequency is set; for other accrual frequencies, the processing frequency is deemed to be the same as the accrual frequency. The default option can be changed. If so, the processing frequency specified must always be greater than the accrual frequency.

The following frequencies are possible:

Accrual Frequency

Alphanumeric, Mandatory

Specify the frequency at which the fee must be accrued in the System. Any of the following frequencies can be set:

No of Decimals

1 Character Maximum, Numeric, Mandatory

Specify the number of decimals for the periodic load. Typically, this must be equal to the number of decimals designated for the currency of payment. Trailer commissions are typically paid in the base currency of the fund.

Next Date to Process

Date, Mandatory

When you are setting up a periodic fee for the first time, you must specify the date on which the fee is to be first processed.

Round-off/Truncate

Alphanumeric, Mandatory

Specify whether the computed load must be rounded-off or truncated.

Minimum Holding Period

Numeric; Optional

You can indicate a minimum period for which the units must be held, before they can be considered for computation of the trailing fee. This value is reckoned in days. It is not mandatory to set a minimum holding period.

If this value is not specified, all holdings during the trailer commission period are eligible for trailer commission.

Last Accrual Date

This indicates the last date on which the periodic fee was accrued.

Last Accrual Application Date

This indicates the last application date when the periodic fee was accrued.

Next Accrual Date

This indicates the next date when the periodic fee will accrue.

FDAP Income

Mandatory

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

Processing Lag Frequency

Alphanumeric; Optional

Specify the lag for the payment of trailer commission arrears. You can specify a monthly lag.

Payment Lag Frequency Description

Display Only

The system displays description for the specified payment lag frequency based on the details maintained in the system.

Payment Lag (Days)

Numeric, Optional

Specify the payment lag to be applicable for the trailing commission fee.

Funds/Products and Groups Sections

If you are defining the periodic fee to be applicable for a product, you must define the specific funds and /or groups in the product portfolio to which the fee would be applied. When you select the product in the Fund/Product/Group ID field, any groups or funds that are mapped to the product portfolio are displayed in these sections.

To specify the funds or groups to which the fee must be applicable, use the arrow buttons to move the selected funds or groups from the Available Portfolios / Available Groups boxes to the Mapped boxes.

Note

It is mandatory that you map all available portfolios to the groups.

FDAP Income

Mandatory

Select to indicate load 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:

Reversals Section

Reversal Date Basis

Alphanumeric; Mandatory

In this field, you can specify whether the impact of transaction reversals must be affected from the transaction date (Reversal at Source) or from the reversal date (Reversal at Current). Depending upon the option you specify here, the basis units for trailer commission would be affected as of the date of reversal (Reversal at Current) or as of the date of the original transaction (Reversal at Source).

If you opt for the Reversal at Source option, you can choose either the transaction date or the price date option.

Reversal Date Basis Description

Display Only

The system displays description for the specified reversal date basis based on the details maintained in the system.

In cases where the accrual frequency is ‘Daily’, and the Reversal at Source option is applicable, and a transaction is reversed, if the transaction date is earlier than the last accrued date for trailer commission, the system recalculates the daily trailer commission from the transaction date to the last accrued date.

Also, in cases where the accrual frequency and payment frequency are different, and the Reverse at Source option is applicable, and a transaction is reversed with the transaction date being earlier than the last paid date, the holdings of such a transaction would have already been considered in the previous trailer commission computation. In respect of such a transaction, the system logs the following details, indicating that the transaction payment has already been done:

Others Section

Price Basis

Alphanumeric; Mandatory

Here, you can indicate the price basis for periodic load computation. The options are:

Holiday Rule for NAV

Alphanumeric; Optional

In this field, you can indicate whether the previous day’s NAV (Prior) or the following day’s NAV (After) is to be considered for market value calculation, if there is an intermediate holiday during the trailer commission period.

Trailer Commission Transaction Pickup Basis

Alphanumeric; Optional

In this field you can indicate the basis upon which the AUM for the trailer commission would be arrived at. The options available are:

Description

Alphanumeric; Optional

Specify description for the specified trailing commission transaction pickup basis.

Basis for Units

Alphanumeric; Optional

In this field, you can indicate whether the trailing commission is to be based on settled units or all units (both provisional and settled).

Price Component

Alphanumeric, Mandatory if the Price Basis is Component Based

If the price basis for periodic load computation is component based, then select the fund price component to be utilized for computation from the list. The list displays all the components belonging to the type ‘User Entered’.

Include for Netting?

Optional

Select ‘Yes’ from the adjoining drop-down list, if you need to net the fees or incentive amount. The system defaults the value as ‘No’.

Vat Percentage

Numeric; Optional

Specify a valid percentage you need to apply for the period load commission.

Threshold on Ongoing Fee

Optional

Specify threshold amount for ongoing fees, if the load type mapped is ‘ROA’ load.

The system compares the value specified with the cumulative AUM of the client to determine the Trailer fees to be charged.

Trailer Comm Aum Slab Basis

Mandatory

Specify a valid basis system to pick up AUM to determine the trailer commission load slab. Few of the basis systems are:

You can not change the AUM basis specified for trailer commission in the accrual cycle after it is defined.

Fund Load Details Section

Fund ID

Alphanumeric, Mandatory

Specify the fund id. The adjoining option list displays valid fund ids maintained in the system. You can choose the appropriate one.

Load ID

Alphanumeric, Mandatory

Specify the load id. The adjoining option list displays valid load ids maintained in the system. You can choose the appropriate one.

Management Fee Load ID

Alphanumeric, Mandatory

Specify the load id of the management fee. The adjoining option list displays valid management fee load ids maintained in the system. You can choose the appropriate one

8.7 Periodic Load Maintenance (Summary) Screen

This section contains the following topics

8.7.1 Invoking the Periodic Load Maintenance Summary Screen

After you have set up a periodic load, you must have another user authorize it so that it would be effective in the system.

Before the periodic load is authorized, you can edit it as many times as necessary. You can also delete a periodic load before it is authorized.

After authorization, you can only make changes to a periodic load through an amendment.

The ‘Periodic Load Maintenance Summary’ screen can be used for the following operations on periodic loads:

You can invoke the ‘Periodic Load Maintenance Summary’ screen by typing ‘UTSPERLM’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

8.7.2 Retrieving Periodic Load

To perform any operation on a periodic load record:

Note

You can also retrieve an individual Load ID from the Detail screen by doing query in the following manner:-

Example

You can search the record for Load ID by using the combination of % and alphanumeric value.

8.7.3 Editing Periodic Load Maintenance Details

You can modify the details of a periodic load that you have already entered into the system, provided it has not been subsequently authorized. You can perform this operation as follows:

8.7.4 Viewing Periodic Load Maintenance Details

To view the periodic load maintenance details that you have previously entered:

8.7.5 Deleting Periodic Loads

You can delete only unauthorized periodic loads in the system. To delete a Periodic load:

8.7.6 Authorizing Loads

An unauthorized periodic load must be authorized in the system for it to be processed. To authorize a periodic load:

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

8.7.7 Amending Periodic Loads

After a periodic load is authorized, it can be modified using the Unlock operation from Action list. To make changes to an after authorization, you must invoke the Unlock operation which is termed as Amend Operation.

8.7.8 Authorizing Amended Loads

An amended periodic load must be authorized for the amendment to be made effective in the system. The process of authorization is the same as that of normal authorization process.

8.7.9 Copying Attributes

If you want to create a periodic load having the same attributes of an existing periodic load, you can copy the attributes of an existing periodic load to a new periodic load.

To copy the attributes:

8.8 Computation of Trailing Fees

The computation of trailing fees depends upon the method of calculation that is specified for the trailing fee load. The fee can be calculated either using the Average Holdings approach or the Quarterly Average Holdings approach.

The method of computation also depends upon the entity for whom the fee is payable (i.e., the From Entity). The ‘From Entity’ could be the fund, the AMC or the unit holder.

The two approaches are explained below. Let us suppose that the trailing fee has been set up with the following slabs:

From Amount

To amount

Return Value (%age)

0

10000

1.25%

10000

30000

2.50%

30000

And above

3.50%

Quarterly Average Holdings approach (when the From entity is the fund or the AMC)

In this approach, instead of considering the value of holdings on each day leading up to the processing date, the balances as on every quarter are considered for calculating the average, on the processing date.

Average Holdings approach (when the From entity is the unit holder)

In this approach, the holdings held by each unit holder associated with the broker for whom the fee is being calculated are summed up for each day till the day of processing is reached, and the average value is taken on that date.

8.9 Methodologies of Trailer Commission Computation

The maintenance required for various methods of computation for trailer commission is indicated below:

Methodology

Trailer commission

Accrual frequency

Payment frequency

Daily trailer commis­sion, based on AUM and Trailer Commission (TC) rate

Daily trailer commission = (Daily AUM * TC rate) / 365

Daily or greater than daily; should be less than pay­ment frequency

Monthly

Quarterly

Half yearly

Yearly

Daily trailer commission (based on AUM, Man­agement fee, TC rate)

Daily trailer commission = (Daily AUM * Manage­ment fee rate * TC rate) / 365

Daily or greater than daily; should be less than pay­ment frequency

Monthly

Quarterly

Half yearly

Yearly

Monthly trailer commis­sion (based on AUM on last day of month)

Monthly trailer commis­sion = (AUM on last day of month * TC rate)/12

Monthly or greater than Monthly; should be less than payment frequency

Monthly

Quarterly

Half yearly

Yearly

Monthly trailer commis­sion (based on Average AUM for the month)

Monthly trailer commis­sion = (Average AUM for the month * TC rate) / 12

Average AUM for month = Sum(Daily AUM for the month) / Actual number of days in month

Monthly or greater than Monthly; should be less than payment frequency

Monthly

Quarterly

Half yearly

Yearly

Monthly trailer commis­sion (based on Opening and Closing AUM for the month)

Monthly trailer commis­sion = (Average of Opening and Closing balance of AUM * TC rate) / 12

Monthly or greater than Monthly; should be less than payment frequency

Monthly

Quarterly

Half yearly

Yearly

Quarterly trailer com­mission (based on AUM on last day of quarter)

Quarterly trailer commis­sion = (AUM on last day of quarter * TC rate) / 4

Quarterly or greater than Quarterly; should be less than payment frequency

Quarterly

Half yearly

Yearly

Quarterly trailer com­mission (based on Average AUM for the quarter)

Quarterly trailer commis­sion = (Average AUM for the quarter * TC Rate)/4

Quarterly or greater than Quarterly; should be less than payment frequency

Quarterly

Half yearly

Yearly

Quarterly Trailer Com­mission (based on Opening and Closing AUM for the quarter)

Quarterly trailer commis­sion = (Average of open­ing and Closing balance of AUM * TC rate) / 4

Quarterly or greater than Quarterly; should be less than payment frequency

Quarterly

Half yearly

Yearly

In the Periodic Load Details screen, the setup for each of these methods would be as shown below:

AFS Trailer commission methodology

Computation method

Accrual frequency

Payment or Processing frequency

Daily Trailer Commission (based on AUM and TC rate)

Average Daily Bal­ance

Daily

Monthly

Daily Trailer Commission (based on AUM, Management fee and TC Rate)

Average Daily Bal­ance with manage­ment fee

Daily

Monthly

Monthly Trailer Commission (based on AUM on last day of month)

Latest Balance

Monthly

Monthly

Monthly Trailer Commission (based on Average AUM for the month)

Average Daily Bal­ance

Monthly

Monthly

Monthly Trailer Commission (based on Opening and Clos­ing AUM for the month)

Average of First and Last Day AUM

Monthly

Monthly

Quarterly Trailer Commission (based on AUM on last day of quarter)

Latest Balance

Quarterly

Quarterly

Quarterly Trailer Commission (based on Average AUM for the quarter)

Average Daily Bal­ance

Quarterly

Quarterly

Quarterly Trailer Commission (based on Opening and Clos­ing AUM for the quarter

Average of First and Last Day AUM

Quarterly

Quarterly

8.10 Trailer Commission Processing

This section contains the following topics

8.10.1 Processing accrual of trailer commission

The accrual of trailer commission for a fund or group of funds can be executed as a job, which you can trigger in the ‘Trailing Commission Accrual Processing’ screen.

You can invoke this screen by typing ‘UTDTCAC’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

Specify the ID of the fund or fund group for which the trailing commission is to be accrued.

8.10.2 Processing payment of trailer commission

The payment of accrued trailer commission for a fund or group of funds can be executed as a job, which you can trigger in the ‘Trailing Commission Payment Processing’ screen.

You can invoke this screen by typing ‘UTDTCPP’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

Specify the ID of the fund or fund group for which accrued trailing commission is to be paid.

8.11 Target Based Fee

This section contains the following topics

8.11.1 Maintaining Target Based Fee

On achieving target sales for a given period, an agent/broker is paid an additional fee/brokerage. The broker/agent is eligible to receive a commission on total sales done by him in a given period.

You can maintain target based brokerage at AMC-Fund-Broker level using the ‘Target Based Fee’ screen. You can invoke this screen by typing ‘UTDTGBFE’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. The screen is displayed below:

AMC

Specify the AMC. You can also select the AMC for target based fee from the adjacent option list. The list displays all the valid authorized values maintained in the system.

You can select ‘ALL’ option if you want to select all the valid AMC maintained in the system.

Load ID

Specify the Load. You can also select the load from the adjacent option list. The authorized loads having the ‘Slab Mode’ option selected as ‘Date Amount’ will be displayed in the option list.

Load Description

The description of the selected load is displayed.

Fund ID

Specify the fund. You can also select the fund from the adjacent option list. The list displays all the valid authorized values maintained in the system.

You can select ‘ALL’ option if you want to select all the valid funds maintained in the system.

Fund name

The description of the selected fund is displayed.

Broker ID

Specify the broker ID. You can also select the broker from the adjacent option list. The list displays all the valid authorized values maintained in the system.

You can select ‘ALL’ option if you want to select the entire valid broker maintained in the system.

Broker Name

The description of the selected broker is displayed.

Process Date

Specify the processing date. The target based brokerage is processed on this date. If the date maintained here is a system holiday, then the system will process the brokerage only on the next working day.

Reference Number

On saving the transaction, a unique reference number is generated.

Processed

The system displays ‘Yes’ value if the transaction is processed on the processed date.

During EOD batch, all the unprocessed transactions with processing date less than or equal to application date will be considered for processing. Based on the load setup, all the transactions with transaction date within the date range specified in the load will be considered. Transaction amount (in fund base currency) will be the basis amount for fee computation. In case of unit based transaction, units applied and latest available NAV will be used to derive the basis amount. If latest NAV is not available, then the system will use the par value. Transaction with in-complete exchange rate details will not be considered for processing. The computed brokerage will be stored in the system.

8.12 Target Based Fee Summary Screen

This section contains the following topics

8.12.1 Invoking the Target Based Fee Summary Screen

After setting up a target based brokerage, another user must authorize it so that it would be effective in the system.

You can edit the transaction any number of times before the target based fee is authorized. You can also delete a target based fee before it is authorized.

After authorization, you can only make changes to the transaction.

The ‘Target Based Fee Summary’ screen can be used for the following operations:

You can invoke the ‘Target Based Fee Summary’ screen by typing ‘UTSTGBFE’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

8.12.2 Retrieving/Viewing Target Based Fee Details

To retrieve a previously entered exchange rate record:

Note

You can also retrieve a target based fee detail from the Detail screen by doing query in the following manner:

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

8.12.3 Editing Target Based Fee Details

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

8.12.4 Deleting Target Based Fee Details

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

8.12.5 Authorizing Target Based Fee Details

Apart from the maker, someone else must authorize an unauthorized broker deal in the system for it to be processed. To authorize a record:

8.12.6 Amending Target Based Fee Details

After a target based brokerage is authorized, it can be modified using the Unlock operation from Action list. To make changes to a record after authorization:

8.12.7 Closing Target Based Fee Details

After a target based brokerage is authorized, it can be closed using the Close operation from Action list. To close a record:

8.12.8 Reopening Target Based Fee Details

After a target based brokerage is closed, it can be reopened using the Reopen operation from Action list. To reopen a record after closure:

8.13 Entity Commission

This section contains the following topics:

8.13.1 Invoking the Entity Commission Sharing Detail Screen

Trailer commission on holdings in a fund, is typically paid by the fund to the master distributor agent, and the sharing of trailer commission between the master distributor and other transaction intermediaries is processed based on the hierarchy level holdings.

The rules according to which trailer commissions could be shared can be set up in the ‘Entity Commission Sharing Detail’ screen. You can invoke this screen by typing ‘UTDENTCO’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

In this screen, the sharing of commission could be set up by providing the following details:

Note

You will not be able to specify the commission percentage, if Admin Tax Sharing is opted as the type of commission to be shared.

Based on the AMC-Distributor agreement, the commission share of the Branches and IFAs could be processed at the AMC. For this, the commission sharing set up is to be maintained at fund level. At the AMC installation, the set up applies only to AMC funds; at the Distributor, the set up applies to other funds too.

8.14 Campaign Maintenance

This section contains the following topics:

8.14.1 Invoking the Campaign Maintenance Screen

On certain instances, based on some criteria an AMC may offer certain discount to the investors on a fund or group of funds or for all funds. Encouraging business by offering certain discounts to the investor is called Campaign. It is similar to the incentive/fee concept.

You can maintain the campaign details in the ‘Campaign Maintenance’ screen. You can invoke this screen by typing ‘UTDCMPMN’ in the field at the top right corner of the Application tool bar and click the adjoining arrow. The screen is displayed below:

In this screen, you can maintain the following details:

Campaign Code

Mandatory

Specify the code to identify the campaign,

Campaign Description

Mandatory

Specify a name to the campaign.

Campaign Start Date

Date; Mandatory

Specify the campaign start date.

Campaign End Date

Mandatory

Specify the campaign end date. The end date cannot be less than or equal to the Application date.

8.14.2 Fund Mapping Tab

Fund ID

Mandatory

Specify the fund which has to be mapped to the campaign. You can also select the funds to be mapped from the option list provided. The option list consists of valid and authorised funds maintained in the system.

Fund Name

Display

On selecting the fund ID, the fund name is displayed.

8.14.3 Load Mapping Tab

Select ‘Load Mapping’ tab to map a load with an override load.

In this screen, you can maintain the following details:

Load ID

Mandatory

Specify the load ID which should be mapped to the overridden load.

From Load Description

The description of the load is displayed.

Overridden Load ID

Specify the overridden load ID which should override the ‘from load’.

To Load Description

The description of the load is displayed.

8.14.4 Campaign Criteria Tab

Click ‘Campaign Criteria’ tab to maintain the criterion for the campaign.

In this screen, you can maintain the following details:

Investor Category

Optional

Specify the investor’s category. You can also select the category from the adjacent option list. The list consists of valid investor categories maintained in the system.

Communication Mode

Optional

Specify the mode of communication. You can also select the mode of communication from the option list provided. The list consists of valid communication modes maintained in the system.

Occupation

Optional

Specify the occupation of the investor.

Staff Related

Optional

Specify the related staff of the investor.

Birthday

Optional

Specify the birthday of the investor.

No Of Transactions

Optional

Specify the number of transactions to be made by the investor to avail the campaign.

Re-Activated Suspension Accounts OF RSP

Optional

Mention the RSP account number.

AUM

Optional

Specify the fund level corpus (AUM i.e. Asset Under Management)

AUM Currency Code

Conditional

Specify the AUM currency. You can also select the AUM currency from the adjacent option list. The list consists of valid and authorised currency codes maintained in the system.

Currency Description

Display

The currency of the selected AUM currency code is displayed.

Investment Amount

Optional

Specify the amount invested by the investor.

Investment Amount Currency Code

Conditional

Specify the investor’s amount currency code.

Currency Description

Display

The currency of the selected currency code is displayed.

This feature is available only for subscription, switch in and RSP type of transaction. If more than one campaign is running at the same time for a fund, user will select the best campaign for the investor while capturing the transaction.

8.15 Campaign Summary Screen

This section contains the following topics

8.15.1 Invoking the Campaign Summary Screen

You can invoke this screen by typing ‘UTSCMPMN’ in the field at the top right corner of the Application tool bar and click the adjoining arrow. The screen is displayed below:

8.15.2 Retrieving/Viewing Campaign Details

You can retrieve/view the campaign details as follows:

8.15.3 Editing Campaign Details

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

Note

While amending the campaign details, the campaign end date should not be less than or equal to the Application date.

8.15.4 Deleting Campaign Details

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

Note

The maker of the record can only delete the unauthorized record.

8.15.5 Authorizing Campaign Details

Apart from the maker, someone else must authorize an unauthorized broker deal in the system for it to be processed. To authorize a record:

8.15.6 Amending Campaign Details

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

Note

While amending the campaign details, the campaign end date should not be less than or equal to the Application date.

8.16 Admin Tax Maintenance

This section contains the following topics:

8.16.1 Invoking the Admin Tax Maintenance Screen

Admin Tax calculated by an external system will be sent to FCIS System as an external file. This can be interfaced and imported into FCIS system. Admin Tax calculated by an external system, can be imported into FLEXCUBE. The amount is accrued and proportionately distributed among the credit unions with respect to the business made till date.

If Calculation method is set to 'Daily', then the admin tax is computed and processed daily taking outstanding balance till date into consideration. On the other hand, if the calculation method is set to 'Average', the admin tax is computed monthly taking average balance into consideration.

Note

This feature is only available if your installation has requested for it.

You can invoke the ‘Admin Tax Maintenance Detail’ screen by typing ‘UTDADTAX’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

AMC

Mandatory

Specify the AMC from which the Admin tax would be distributed. You can make your choice by using the option list.

Rule Effective Date (DD/MM/YYYY)

Date, Mandatory

Specify the date on which the admin tax needs to be captured.

Note

The effective date can be lesser than or equal to the system date.

FundID

6 Character Maximum, Alphanumeric, Mandatory

Select the ID of the fund to which the admin tax needs to be distributed.

ISIN Code

12 Characters Maximum; Alphanumeric; Mandatory

Select the ISIN Code of the fund to which the admin tax needs to be distributed.

Admin Tax Value

Mandatory

Specify the admin tax value to be distributed here.

Note

The amount specified here should be greater than zero.

To Entity Type

Mandatory

Specify the entity to which the admin tax needs to be distributed. You can make your choice by using the drop-down list.