5. Setting up Load Groups

This chapter contains the following sections:

5.1 Load Groups

The AMC may need to group funds together based on common load and transaction processing characteristics, such as the same loads being applied to transactions in all funds in the group, or applicability of certain preferences maintained for investors.

Such a group of funds, which entail common load or transaction processing characteristics, are called load groups.

This is typical in the case of loads that are cumulative across funds (such as in the case of Rights of Accumulation), and also load patterns for Letter of Intent investors. This is also typical in the case of loads that are applied to funds that form part of a investment product or policy (plan) portfolio.

5.2 Rights of Accumulation

The AMC may give investors benefits based on the history of their investment in the funds of the AMC. This benefit would typically be a fee benefit, such as reduced transaction charges or reduced commissions, and is offered based on the history of investments.

This benefit facility given to the investor is known as the Rights of Accumulation facility.

Investors are given the option of availing of the Rights of Accumulation, at their discretion. Thus, when an investor transacts in a fund of the AMC, the history of the investor’s transactions in the fund is considered when the fee is applied for the transaction, if the investor has chosen to avail of the Rights of Accumulation facility.

The AMC reserves the discretion to interpret the history of investment of each investor on the basis of which, the Rights of Accumulation benefit would be available. Also, the AMC reserves the discretion to identify a single fund or a group of funds for which it would offer the Rights of Accumulation facility to investors, as well as the method of interpretation of investments, to be applicable for each group. The AMC can also specify whether the holdings across all the investors under a CIF account are to be considered for ROA.

Any individual fund for which the AMC designates Rights of Accumulation as applicable are called ROA funds, and any group of such funds is called an ROA group. An investor that opts to avail of the Rights of Accumulation is called an ROA investor. Also, the investor can override the AMC option of availing ROA at a CIF account level.

Interpreting the history of investments

The interpretation of the past investments of an investor in the case of Rights of Accumulation, for any ROA group of funds, would be based on any of the following aspects, at the AMC’ choice:

Depending upon the option chosen by the AMC for each ROA group of funds, any new transaction for the investor in the ROA group would take into consideration the value of the past investments, when the slab for loading is considered.

The following example will make this clearer:

For instance, let us suppose that an ROA investor, Mr. Colin White, would like to invest 10000 currency units in the Carey Bugle Growth Fund, which is part of an ROA group of funds known as LGROA, on 02-01-2003.

Before 02-01-2003, he has invested in the LGROA group of funds of which the Carey Bugle fund is a constituent, as follows:

Fund of ROA group (LGROA)

Present holdings (units)

Total amount invested in ROA group (TA1)

Carey Bugle Growth Fund (CBGF)

10000

100000

Farley Income Fund (FIF)

5000

50000

 

15000 (sum)

150000 (sum)

The worth of the holdings in the LGROA group in terms of NAV prevalent on 02-01-2003:

Fund

Present holdings (units)

NAV on 02-01-2003

Total worth of holdings (TA2)

CBGF

10000

12

120000

FIF

5000

12

60000

 

15000 (sum)

 

180000 (sum)

 

The worth of the holdings in the LGROA group in terms of subscription prices on 02-01-2003:

Fund

Present holdings (units)

Subscription price on 02-01-2003

Total worth of holdings (TA3)

CBGF

10000

11

110000

FIF

5000

12

60000

 

15000 (sum)

 

170000 (sum)

The AMC has chosen Option (4) as the basis for applicability of Rights of Accumulation for the LGROA group. Since the value TA2 is higher than TA1, the value taken for identifying the loading slab for any new transactions for Mr. White in the LGROA group is taken to be TA2.

The load slabs defined for the LGROA group, of which the two funds are a part, are as follows:

Slab

From Amount

To Amount

Return Value (%)

001

0

10000

5

002

10000

20000

4

003

20000

40000

3

004

40000

80000

2

005

80000

16000

1

006

160000

320000

0.25

Now for Mr. White’s subscription transaction of 10000 currency units on 02-01-2003, the amount considered for identifying the slab, according to the ROA option chosen by the AMC for the LGROA group = Transaction Amount + TA2 = 10000 + 180000 = 190000 currency units.

This would fall in slab 006 for the fund and so, the applicable return value percentage would be 0.25%.

5.3 Load Groups Creation

This section contains the following topics:

5.3.1 Invoking FCIS Group Definition Screen

In Oracle FLEXCUBE Investor Servicing, you create a load group as follows:

To create a load group in the system, use the ‘FCIS Group Definition Detail’ screen. You can invoke this screen by typing ‘UTDGRPDF’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

 

You must specify the following as mandatory information for the creation of a load group:

You can specify the following fields in this screen:

Group ID

Alphanumeric; 6 Characters; Mandatory

Specify a unique alphanumeric identifier for the load group. You will use this ID to set up characteristics for the group.

Group Description

Alphanumeric; 255 Characters; Mandatory

Enter descriptive text, a short phrase that qualifies the group.

LOI Transaction

Mandatory

Choose ‘Yes’ from the drop-down list to indicate the applicability of Letters of Intent for funds in the group.

Choose ‘No’ from the drop-down list if the LOI investors investing in the group cannot avail of the Letter of Intent facility.

ROA Applicable

Mandatory

Choose ‘Yes’ for this option to indicate the applicability of Rights of Accumulation for funds in the group.

Choose ‘No’ if the ROA investors investing in the group cannot avail of the Rights of Accumulation facility.

ROA Computation Method

Numeric; 1 Character; Mandatory if ROA is applicable for the group

Specify the method of interpreting the history of investments, which will be used to arrive at the basis for ROA computation, for any investments by unit holders into the ROA group.

The following methods could be available:

Based on the value selected, the system displays the description in the adjacent field.

Include Current Transactions for ROA

Optional, Applicable only if ROA is applicable for the group

Choose ‘Yes’ for this option to indicate that current transactions are to be taken into consideration when the selected method of interpretation of investments (ROA computation method) is applied on investments into the ROA group.

Rule Effective Date

Date Format; Mandatory

This is the date from which the group definition is effective. It should be later than or the same as the application date. You can select the date from the calendar provided.

Remarks

Alphanumeric; 255 Characters; Optional

Specify remarks, if any.

Fund Available

Fund ID

Alphanumeric; 6 Characters; Mandatory

You can select the funds that you want to designate to be part of the load group. A fund can be mapped to more than one load group.

Fund Name

Display

The system displays the fund name for the selected fund ID.

Fund Identification Number

Display

The system displays the fund identification number.

5.4 Group Load Mapping Summary Screen

This section contains the following topics:

5.4.1 Retrieving Record in Group Load Mapping Summary Screen

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

Invoke the ‘Group Load Mapping Summary’ screen by typing ‘UTSGRPDF’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button..

 

To perform any operation on a group load mapping record, you must first retrieve the record from the database in the Summary screen.

To retrieve a record for viewing, select View in the Operation field. Specify the Group ID and the Rule Effective Date of the group whose record you want to retrieve, and click OK. (In the Operation field, you must select the operation that you want to perform, before you specify the search criteria.)

All the group mapping records that match your search criteria are displayed in the lower list portion of the screen.

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 Group ID by using the combination of % and alphanumeric value as follows:-

5.4.2 Editing Group Load Mapping

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

5.4.3 Viewing Group Load Mapping

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

5.4.4 Deleting Group Load Mapping

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

5.4.5 Authorizing Group Load Mapping

An unauthorized Group Load Mapping must be authorized in the system for it to be processed. To authorize a record:

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

5.4.6 Amending Group Load Mapping

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

5.4.7 Authorizing Amended Group Load Mapping

An amended Group Load Mapping maintenance 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.

5.4.8 Copying Attributes

If you want to create a new Group Load Mapping with the same attributes of an existing maintenance, you can copy the attributes of an existing Group Load mapping to a new one.

To copy the attributes:

5.5 Load Group Characteristics Screen

This section contains the following topics:

5.5.1 Invoking the Group Characteristics Detail Screen

To specify the load and transaction processing characteristics that would apply to transactions in funds in a load group, use the ‘Group Characteristics Detail’ screen.

Invoke this screen by typing ‘UTDGRPCH’ 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 group that you are defining.

 

You can specify any of the following loading parameters that would be applicable for all funds in the group:

For a fuller discussion of what Letters of Intent are and how an investor can opt to avail of the same, refer the Managing Investor Accounts chapter.

You need to specify the following fields in this screen:

The following fields are available for data entry in the Load Group Characteristics screen:

Group Characteristics Details

Group ID

Alphanumeric; 6 Characters; Mandatory

From the list, select the group of funds for which you are setting up the common load and transaction processing characteristics for transactions.

Default LOI Period (Days)

Numeric; 3 Characters; Mandatory

Specify the default period (in days) for the Letter of Intent facility availability that would apply to all funds in the group.

Escrow Percentage

Numeric; 5 Characters; Mandatory

Specify the escrow percentage that is to apply to LOI investors who transact in the funds of the group.

For LOI investors, the AMC stipulates a certain threshold percentage of holdings that must always be maintained. A redemption transaction due to which the holdings balance in the funds of the group falls below this percentage, will not be accepted. This percentage is called an escrow percentage.

Prior Credit Period for LOI (Days)

Numeric; 3 Characters; Mandatory only if prior credit is allowed.

If prior credit is permitted to investors for fulfillment of LOI in any of the funds in the group, specify the duration (in days) of the period.

Rule Effective Date

Date Format; Mandatory

Specify the date on and following which the load group characteristics you are specifying for the group will be effective.

Lead Time for Amount Verification (Days)

Numeric; 12 Characters; Mandatory

Specify the lead time applicable, if any, for the verification of amounts for LOI or ROA applicability that is to apply to all funds in the group.

Dividend Reinvestments Impact ROA

Mandatory

If you choose ‘Yes’, then the units increased due to dividend reinvestment will also be considered for ROA. The system will consider the Reinvestment Units in terms accumulated units.

Prior Credit Allowed For LOI

Mandatory

Select ‘Yes’ from drop-down list to indicate that a prior credit period is permitted for the fulfilment of LOI amount, for LOI investors.

If you select ‘No’, none of the transactions of an investor earlier than the transaction date, will be reckoned to affect the LOI used up amount.

SI Applicable for LOI

Mandatory

Select ‘Yes’ from drop-down list to indicate that standing instructions are permitted to be accepted for investors transacting in the load group.

Reinvestment Applicable for LOI

Mandatory

Select ‘Yes’ from drop-down list to indicate that reinvestment instructions are permitted to be processed for investors transacting in the load group.

Redemption Affect LOI

Mandatory

Select ‘Yes’ from drop-down list to indicate that redemption transactions can be taken into account for reducing the LOI amount for LOI investors that invest in the load group.

Switch Affect LOI

Mandatory

Select ‘Yes’ from drop-down list to indicate that switch transactions can be taken into account for reducing the LOI amount for LOI investors that invest in the load group.

Switch Impact ROA

Mandatory

If you choose ‘Yes’, the system will take into account the fluctuation of units due to Switch in while computing Accumulated Units.

5.6 Load Group Characteristics Maintenance Summary Screen

This section contains the following topics:

5.6.1 Retrieving Record in Load Group Characteristics Maintenance Summary Screen

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

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 Group ID by using the combination of % and alphanumeric value as follows:-

5.6.2 Editing Load Group Characteristics Maintenance

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

5.6.3 Viewing Load Group Characteristics Maintenance

To view a record that you have previously input, you must retrieve the same in the Load Group Characteristics Maintenance Summary screen as follows:

5.6.4 Deleting Load Group Characteristics Maintenance

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

5.6.5 Authorizing Load Group Characteristics Maintenance

An unauthorized Load Group Characteristics Maintenance must be authorized in the system for it to be processed. To authorize a record:

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

5.6.6 Amending Load Group Characteristics Maintenance

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

5.6.7 Authorizing Amended Load Group Characteristics Maintenance

An amended Load Group Characteristics Maintenance 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.

5.6.8 Copying Attributes

If you want to create a new Load Group Characteristics Maintenance with the same attributes as that of an existing maintenance, you can copy the attributes of an existing Load Group Characteristics Maintenance to a new one.

To copy the attributes:

5.7 Non-fulfilment of Letter of Intent

This section contains the following topics:

5.7.1 Monitoring Fulfilment of Letter of Intent

If an investor does not bring in the investment amount promised in a letter of intent, before the expiry of the letter of intent, it constitutes non-fulfilment, and the AMC can recover the applicable commission that would have been due without the letter of intent.

The system monitors the fulfilment of letters of intent. The following facilities are available in the system:

Prior Warning Report

On the date that marks the beginning of the start of the lead time period for the load group, a prior warning report is generated by the system during the Beginning of Day (BOD) process. This report contains information about those letters of intent that have not been fulfilled as on that date.

For instance, if the letter of intent expires on 15th June 2002 and the lead-time specified for the load group is 10 days, , a BOD process is executed on 5th June 2002 to ascertain whether the investor has satisfied the letter of intent amount agreed upon. This verification is performed for all letters of intent.

The report identifies and displays the following information for each letter of intent for any investor which is unfulfilled as on the date that marks the beginning of the lead time period:

Post-Adjustment Report

In the event of non-fulfilment of a letter of intent, you can obtain a report (known as the post adjustment report) that displays the actual commission that would have been due on any transactions entered into by the investor, had the letter of intent not been applied.

5.7.2 Invoking Lol Adjust Proc Screen

To obtain such a report, you must trigger the computation and storing of the actual commission data, from the system database. You can use the ‘Lol Adjust Proc’ screen for this. You can invoke this screen by typing ‘UTDLOIPR’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

 

LOI Adjustment Processing

LOI Number

Alphanumeric; 25 Characters; Optional

Specify the LOI number of the corresponding letter of intent, on the next business date after the expiry date of the letter of intent.

In this screen, you must specify the LOI number of the corresponding letter of intent, on the next business date after the expiry date of the letter of intent. Click on the Process button to trigger the process of computation and storage. Alternatively, if you do not specify the number, you can trigger the computation of commission data for all such letters of intent that are unfulfilled, after the expiry date.

After you have triggered the computation of commission data, in the LOI Adjustment Processing screen, you can use the LOI Non-Fulfilment menu item in the Batch menu to obtain the actual report.

The report contains details of the actual commission due on each of the transactions without considering the letter of intent. This amount must be recovered from the unit holder by the AMC.

The following details are displayed in the report for each letter of intent for any investor which is unfulfilled as on the next business date after the expiry date:

The commission for each of the LOI transactions entered into during the LOI period is recomputed as if there had been no letter of intent. For each transaction, the actual commission collected and the commission that should have been collected without the LOI is displayed. The sum of the commissions will be subtracted from the actual commission collected and the difference is reported through the report.

5.8 Group Load Mapping

This section contains the following topics:

5.8.1 Invoking Group Load Mapping Screen

To designate different fees or incentives that are levied during the processing of transactions, as applicable for transactions in funds of specific load groups, use the ‘Group Load Mapping Detail’ Screen.

You can invoke this screen by typing ‘UTDLDGRP’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. The ‘Group Load Mapping 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 group load.

A simple mapping can be done where the appropriate fees or incentives, called loads in the system, may be tagged as applicable to the appropriate transaction types for all funds in the appropriate load groups.

You can also designate the loads as applicable to certain reference types of transactions, such as standing instructions, policy transactions in funds of the load group and so on.

Before you set up a Group Load mapping profile record for a load group, it is desirable to ensure that the following information is already setup in the system:

You can specify the following fields in this screen:

Group Load Mapping

Group ID

Alphanumeric; 6 Characters; Mandatory

Select the ID of the load group for which the group load mapping profile is being set up, from the options provided.

Rule Effective Date

Date Format; Mandatory

Specify the Rule Effective Date for the load group for which the group load mapping profile is being set up.

Transaction Type

Mandatory

This is to indicate the transaction type for which the loads are being defined. Select the Transaction Type from the list given in the drop-down list. The list displays the following values:

Rule Effective Date

Date Format; Mandatory

Specify the Rule Effective Date.

Load ID

Numeric; 5 Characters; Mandatory

Specify the name of the Load (fee/incentive) that must be applied for the selected load group. You may make your choice from the options provided in the drop-down list.

Load To Price

Mandatory

Select ‘Yes’ from drop-down list to indicate that this load is to be loaded to the base price.

Priority Number

Numeric; 5 Characters; Mandatory

Enter a value to specify the priority number in case of optional loads.

For a mandatory load, the priority number is set to 0 and for an optional load the priority number should be unique i.e. for a given load group, no more than one load can have the same priority number.

From Entity Type

Alphanumeric; 1 Character; Mandatory

Specify the entity that bears this load.

To Entity Type

Alphanumeric; 1 Character; Mandatory

Specify the entity that will be recipients of the load.

Processing Frequency

Alphanumeric; 1 Character; Mandatory

Specify the processing frequency.

Mandatory

Mandatory

Select Mandatory or Optional to specify whether the load is mandatory or optional, from the drop-down list.

VAT Applicable

Mandatory

Select ‘Yes’ from drop-down list to indicate that the Load to Price is applicable. Therefore VAT Load to Price is dependent on Load to Price.

Contra Account Code

Alphanumeric, 10 Characters; Optional

Specify the code that will be used to identify the second leg of accounting entries for any transaction, in the event of exporting of transaction information to an external system.

Debit or Credit

Optional

Indicate whether the applied load would result in a debit or credit for the funds in the load group from the drop-down list. The list displays the following values:

This data is captured for information purposes only and has no processing implications in the system database. This is to be used in case of an interface with an Asset Management system where details for calculation of NAV would need to be uploaded.

GL Account Code

Alphanumeric; 10 Characters; Optional

Specify the code that will be used to map this load to its corresponding charge code in the external system.

When transaction information is exported to an external system, if separate books of accounts are to be posted for different loads, this code will be used to identify this load information in the export data.

Send for GL Interface

Mandatory

Select ‘Yes’ from drop-down list to indicate that accounting entries due only to the selected load must be posted to the external asset management system, for the load group.

Slab Basis

Optional

Select the basis on which the slabs will be reckoned for an amount-based load that you are designating as applicable for the load group. You can indicate that the slabs must be reckoned on a gross amount or a net. You can select one of the values from the drop-down list:

Differential Fee

Mandatory

Select ‘Yes’ from the drop-down list to indicate that the differential fee in the case of switch transactions for any fund is to be applicable, for the load group.

Round Off/Down/Up

Optional

Select the rounding options for the load amount for the selected transaction type from the drop-down list, for the load group.

Example

Let us suppose that the load amount computed for a subscription transaction is 10.561234, and that this value must be rounded to the 3rd decimal place.

If you indicate rounding up, then the value reckoned would be 10.562.

If you indicate rounding off, then, applying normal rounding off rules, the value reckoned would be 10.561.

If you indicate rounding down or truncation, then the value would be truncated as it is, in the 3rd decimal place, and it would be reckoned as 10.561.

Number of Decimals

Numeric; 1 Character; Mandatory

Specify the maximum number of decimals that would be reckoned for rounding precision, for the load amount.

Price Addin

Mandatory

Select ‘Yes’ from drop-down list to indicate that the add-in factor is to be applicable for computing the return value for the load, for the selected transaction type. The add-in factor is used to arrive at the return value for a load, at the time of allocation.

Indexation on CGT

Optional

Select ‘Yes’ from drop-down list to indicate that the indexation of CGT is applicable for the selected transaction type.

For more information, refer the chapter ‘The Allocation Process’ in the Allocation User Manual.

Available Reference Type

Ref Type

Alphanumeric; 2 Characters; Mandatory

Specify the ref type.

Reftype Description

Display

The system displays the description for the selected ref type.

5.9 Load Group Summary Screen

This section contains the following topics:

5.9.1 Retrieving Record in Load Group Summary Screen

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

 

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.

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 Group ID by using the combination of % and alphanumeric value as follows:-

5.9.2 Editing Load Group Maintenance

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

5.9.3 Viewing Load Group Maintenance

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

5.9.4 Deleting Load Group Maintenance

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

5.9.5 Authorizing Load Group Maintenance

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

5.9.6 Amending Load Group Maintenance

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

5.9.7 Authorizing Amended Load Group Maintenance

An amended Load Group Maintenance 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.

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

5.9.8 Copying Attributes

If you want to create a new Load Group Maintenance with the same attributes as that of an existing maintenance, you can copy the attributes of an existing Load Group Maintenance to a new one.

To copy the attributes: