1.1.6 Switch Allocation

This topic provides information on switch allocation.

Select the option Switch in the Transaction Type of Allocation Detail screen to trigger the allocation of unallotted or partially allotted switch transactions on a business day.

In the case of switch allocation, the following steps are followed:

1. First a Switch From allocation is done for the fund from where the units are being switched for the given unit holder. This allocation considers the switch from as a normal redemption transaction by net amount / units.
2. Then, a Switch To allocation is made for the fund into which the units are being switched for the given unit holder. This allocation is done on the basis of a normal subscription allocation by gross amount.
3. Both the above transactions are system generated based on the switch transaction that has been entered into by the user.

If the switch transaction being allocated is a pseudo-switch, the system will pick the exchange rate defined by you in the Exchange Rate Maintenance Detail screen for the FX Deal Date and FX Value Date combination. If this combination is unavailable, the allocation will fall through. However, for allocation projection, the system will use the FX Spot Rate.

Refer Workflow of Allocation Process for executing the allocation process.

Refer Subscription Allocation for more details.

For more information on Switch allocation, refer to the field description table.

Table 1-5 Switch Allocation

Switch Allocation	Description
Certificate details	If the fund is scrip based or if the unit holder switches out of issued balance in certificate optional funds then Certificate Numbers and DNR numbers are also affected by the switch transaction. The amount of the certificates entered for the switch should be greater or equal to the units that have to be redeemed from the switched out fund. In case the units are greater only one of the certificates can be switched partially.
Amended switch transactions	If an amended switch is allocated then the following changes are reflected after the allocation - first, the changes affected by the original switch are reversed and the current amended switch is reallocated.
Reflection of allocated units in the system database	If the switch transaction is successfully allocated through this menu item, the changes are reflected in the following data stores in the database: The unit holder’s balance in the fund The unit holder counter updating for redemption transactions for the fund The fund transaction counter updating for redemption transactions The outstanding units for the fund Loads (fee/incentive) between the various entities (fund manager - broker, unit holder, agent, etc.) are logged Fund certificate details updating, if the transaction is scrip based If any of these counter limits is exceeded or if any of the fund rules set up at the Fund Manager are violated then an error is logged against the switch transaction. If the switched units for the transaction is greater than the unit holder balance in the fund then the transaction is rejected by the allocation process. Confirmation of the switch transaction is made after the allocation is successfully completed.

Note:

Only reversal is allowed for certificate based switch transaction.