11. Prudential Investment Guidelines

The Prudential investment Guidelines allow for the allocation of the fund asset to a set of components. This is to provision a facility to the client to select whether the underlying fund allocation should be compliant with the Prudential Investment Guidelines or should follow the standard defined by the Foreign Exchange.

This chapter contains the following sections:

11.1 Prudential Investment Guidelines

This section contains the following topics:

11.1.1 Prudential Investment Guidelines Description

Prudential Investment guidelines define the standards for total Onshore cash of the client. PIGS Forex compliance is applicable for Initial Investment, Policy Top Up, Policy Surrender and Switch Transactions.

For example, let us consider a product, mapped to the funds F1 and F2;

The asset allocation for fund F1 is:

The asset allocation for fund F2 is:

Assuming that an investor chooses to invest in the product, with an initial investment of 100,000 ZAR, the various components of F1 and F2 have the corresponding values:

F1

F2

Calculating we get;

Hence we can deduce the percentage allocation for each of the components to be:

The transaction can be processed as it follows the Prudential Investment Guidelines. The Prudential investment guidelines screen provides you with ability to define rules for allocation of a fund asset.

11.1.2 Maintaining Prudential Investment Guidelines

The rules for maintaining the Prudential Investment guidelines are validated in the following manner:

Threshold Amount = Threshold percentage * total investment value across Funds

Repeat this process for all the rules defined in Product maintenance for Prudential Investment Guidelines.

If any of the threshold amount limits violate the maintained guidelines, then the system displays an error along with the erring rule ID and the amount corresponding to the rule identity number. In this instance this particular investment transaction should not be processed.

11.1.3 Invoking PIGS FOREX Compliance Screen

You can invoke the ‘PIGSFOREX Compliance Detail’ screen by typing ‘UTDPIGSC’ 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 PIGSFOREX Compliance.

PIGS FOREX Compliance

Rule Type

Mandatory

Select the rule type from the drop-down list. The list displays the following values:

Rule ID

Alphanumeric; 10 Characters; Mandatory

Specify an identifier for the rule applied to the component

Rule Description

Alphanumeric; 50 Characters; Mandatory

Specify a brief description of the component allocated to the fund investment

Operation

Mandatory

Select that the components are to be considered as equivalent to the percentage of the fund investment allocation from the drop-down list. The list displays the following values:

Threshold percentage(0-100%)

Numeric; 5 Characters; Mandatory

Specify the ratio or percentage attributed to the chosen investment component as an allocation of the investment.

Components Button

Components

Alphanumeric; 50 Characters; Optional

Specify the number of components allocated to the fund investment, you can select more than one component. To incorporate the Investment components click ‘Components’ button. You will be linked to the Investment Components screen. You can select the combination of Investment components with their corresponding percentage.

Refer to the chapter ‘Fund Investment Components’ for more information on specifying fund components for an investment.

Related Components Button

Related Components

Alphanumeric; 50 Characters; Optional

Specify the number of related components allocated to the fund investment, you can select more than one related component.

Once you have specified the entire mandatory details click ‘Ok’ button, to save the record. You will receive a prompt that the record has been saved in the system’s archive.

11.1.3.1 Validating PIGS and FOREX

The system will validate PIGS and FOREX for Outflow policy transactions along with inflow transactions, the, such as surrender and switch out. If system fails to comply these two outflow transactions, it will log the failure as an override message while saving the policy transaction.

11.2 PIGSFOREX Compliance Summary Screen

This section contains the following topics:

11.2.1 Invoking the PIGSFOREX Compliance Summary Screen

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

 

11.2.2 Retrieving PIGSFOREX Compliance in PIGSFOREX Compliance Screen

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

Specify any or all of the following details in the PIGSFOREX Compliance Summary screen:

  1. Select the status of the record in the Authorized field. If you choose the “Blank Space” option, then all the records are retrieved.
  2. Select the status of the record in the Open field. If you choose the “Blank Space” option, then all the records are retrieved.

After you have specified the required details, click ‘Search’ button. All 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 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 Rule ID by using the combination of % and alphanumeric value as follows:

Search by A%: System will fetch all the records whose Rule ID starts from Alphabet ‘A’. For example, AGC17, AGVO6, AGC74 etc.

Search by %7: System will fetch all the records whose Rule ID ends by numeric value’ 7’. For example, AGC17, GSD267, AGC77 etc.

Search by %17%: System will fetch all the records whose Rule ID contains the numeric value 17. For example, GSD217, GSD172, AGC17 etc.

11.2.3 Editing PIGSFOREX Compliance

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

  1. Invoke the PIGSFOREX Compliance Summary screen from the Browser.
  2. Select the status of the record that you want to retrieve for modification in the Authorization Status field. You can only modify records that are unauthorized. Accordingly, choose the unauthorized option from the drop down list.
  3. Specify any or all of the details of the record in the corresponding fields on the screen to retrieve the record that is to be modified. Click ‘Search’ button. All unauthorized records with the specified details are retrieved and displayed in the lower portion of the screen.
  4. Double click the record that you want to modify in the list of displayed records. The PIGSFOREX Compliance Detail screen is displayed.
  5. Select Unlock Operation from Action list to modify the record. Modify the necessary information.
  6. Click Save to save your changes. The PIGSFOREX Compliance Detail screen is closed and the changes made are reflected in the PIGSFOREX Compliance Summary screen.

11.2.4 Viewing PIGSFOREX Compliance

To view a PIGSFOREX Compliance you have previously entered, you must retrieve the same in the PIGSFOREX Compliance Summary screen, as follows:

  1. Invoke the Summary Screen from the Browser.
  2. Select the status of the PIGSFOREX Compliance that you want to retrieve for viewing in the Authorization Status field. You can also view all records that are either unauthorized or authorized only, by choosing the Unauthorized/ Authorized option.
  3. Specify any or all of the details of the records in the corresponding fields on the screen, and click ‘Search’ button. All transactions with the specified details are retrieved and displayed in the lower portion of the screen.
  4. Double click the record that you want to view in the list of displayed records, in the lower portion of the screen. The PIGSFOREX Compliance screen is opened in View mode.

11.2.5 Deleting PIGSFOREX Compliance

You can delete only unauthorized records in the system.

To delete a record that you have previously entered, you must retrieve the same in the PIGSFOREX Compliance Summary screen, as follows:

  1. Invoke the PIGSFOREX Compliance Summary screen from the browser.
  2. Select the status of the record that you want to retrieve for deletion.
  3. Specify any or all of the details of the record in the corresponding fields on the screen, and click ‘Search’ button. All records with the specified details are retrieved and displayed in the lower portion of the screen.
  4. Double click the record that you want to delete in the list of displayed records, in the lower portion of the screen. The PIGSFOREX Compliance Detail screen is opened in View mode.
  5. Select Delete operation from the Action list. The system prompts you to confirm the deletion, and the record is deleted physically from the system database.

11.2.6 Authorizing PIGSFOREX Compliance

An unauthorized record must be authorized in the system for it to be processed.

To authorize a record, you must first retrieve the same in the PIGSFOREX Compliance Summary screen.

  1. Invoke the PIGSFOREX Compliance Summary screen from the Browser.
  2. Select the status of the record that you want to retrieve for authorization. Typically, choose the Unauthorized option from the drop down list.
  3. Specify any or all of the details of the record in the corresponding fields on the screen. Click ‘Search’ button. All records with the specified details that are pending authorization are retrieved and displayed in the lower portion of the screen.
  4. Double click the record that you wish to authorize. The PIGSFOREX Compliance Detail screen is opened in View mode.
  5. Select Authorize operation from Action list.

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

11.2.7 Amending PIGSFOREX Compliance

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

  1. Invoke the PIGSFOREX Compliance Summary screen from the Browser.
  2. Select the status of the record that you wish to retrieve for amendment. You can only amend records that are authorized.
  3. Specify any or all of the details of the record in the corresponding fields on the screen. Click ‘Search’ button. All records with the specified details are retrieved and displayed in the lower portion of the screen.
  4. Double click the record that you want to amend. The PIGSFOREX Compliance screen will be displayed in Amendment mode. Click the Unlock operation from the Action list to amend the record.
  5. Amend the necessary information. Click the Save button to save your changes.

11.2.8 Authorizing Amended PIGSFOREX Compliance

An amended PIGSFOREX Compliance must be authorized for the amendment to be made effective in the system.

Authorization of amended records can only be done from Fund Manager Module and Agency branch Module. The process of authorization is subsequently the same as that for normal transactions.

11.3 PIGS Batch Maintenance

This section contains the following topic:

11.3.1 Invoking PIGS Batch Maintenance Screen

You can maintain PIGS compliance check related parameters using ‘PIGS Batch Maintenance’ screen. You can invoke this screen by typing ‘LEDPIGB’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

 

You can specify the following details:

PIGS Maintenance Screen

Product Administrator

Alphanumeric; 12 Characters; Mandatory

Specify product administrator details. The adjoining option list displays all valid AMC accounts maintained in the system. You can choose the appropriate one.

Next Batch Run Date

Date Format; Mandatory

Specify date for running PIGS compliance batch. This date cannot be lesser than the application date.

The system will track the execution date to check if the contracts are compliant or not. If the contract is not compliant, then the system will increment the failure value by 1. Once the maximum number of count is reached and if it fails again, then it just updates the date without incrementing the count. The failure count for the policy will be reset to ‘0’ once the contract is successful.

While doing this computation, system needs to consider rounding rules maintained at product level.

The system will store the failed policies with the failure details like which rule failed and by how much amount, failure date, portfolio value, each component value, and asset split in a separate data store for reporting/ interfacing purposes.

AUM Date for Next Batch Run

Date Format; Optional

Specify the date to be considered for policy AUM computation. This date cannot be lesser than the application date.

The system will deliver Policy Level AUM as of price date based on Allotted Transactions at Policy Transaction Level.

Product Selection Grid

Product

Alphanumeric; 12 Characters; Mandatory

Specify the product code. The adjoining option list displays all valid Products available for the Policy Administrator.

Description

Display

The system displays the description for the selected product code.

11.4 PIGS Batch Maintenance Summary

This section contains the following topics:

11.4.1 Retrieving a Record in PIGS Batch Maintenance Summary Screen

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

Invoke the ‘PIGS Batch Maintenance Summary’ screen by typing ‘LESPIGB’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button and specify any or all of the following details in the corresponding details.

 

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

11.4.2 Editing PIGS Batch Maintenance Record

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

Click Save to save your changes. The PIGS Batch Maintenance Detail screen is closed and the changes made are reflected in the PIGS Batch Maintenance Summary screen.

11.4.3 Viewing PIGS Batch Maintenance Record

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

11.4.4 Deleting PIGS Batch Maintenance Record

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

11.4.5 Authorizing PIGS Batch Maintenance Record

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

11.4.6 Amending PIGS Batch Maintenance Record

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

11.4.7 Authorizing Amended PIGS Batch Maintenance Record

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

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