1.26 Dilution Levy Load Calculation Batch

This topic provides information on dilution levy load calculation.

Dilution Levy for Fund Family

You can compute net of sales consideration at Fund family level by netting all the Inflows and outflows for a day for the fund family and unitholder combination.

For calculation of Net of sales consideration system will compute gross amount in fund base currency for all transactions. If Fund Base Currency and Reference currency at fund family level are different then you need to convert gross amount in fund base currency into equivalent reference currency amount by using mid rate.

The system will consider pseudo switch across AMCs and within AMCs for net sales consideration. However, switch within fund family and transfers will not be considered for net sales consideration.

The system will perform EOD process which will be scheduled before allocation to identify the applicability of Dilution Levy.

During EOD process, the system will figure out if the net of sales consideration is breaching either inflow or outflow breach value.

Post the computation of Net of sales consideration value for the day, system will apply Dilution Levy to all the transactions for the funds within fund family if Net of sales consideration value is greater than inflow or outflow breach factor value.

Inflow Breach factor Value = (summation of BOD fund corpus values for all the funds in the fund family in reference currency) * Inflow Breach Factor / 100

Outflow Breach factor Value = (summation of BOD fund corpus values for all the funds in the fund family in reference currency) * Outflow Breach Factor / 100

If the net of sales value is a positive number (which means subscriptions are more than redemptions) then the system should apply the Inflow breach value to decide if Dilution Levy is applicable or not. If breached then, Dilution Levy load will be applied to all the applicable inflow and outflow transactions.

If net of sales value is a negative number (which means redemptions are more than subscriptions) then the system should apply the Outflow breach factor to decide if Dilution Levy is applicable or not. If breached then, Dilution Levy load will be applied to all the applicable inflow and outflow transactions.

The following table details the various scenarios for net sales consideration:

Table 1-34 Scenarios for net sales consideration

Transaction Types	System Behavior for Net Sales consideration Calculation
Future Dated Transactions	Will not be considered for current day's net of sales consideration.
Reversal Transaction	Both original transaction and reversed transaction will not be considered for current day's net of sales consideration
Cancellation transaction	Both original transaction and cancelled transaction will not be considered for current day's net of sales consideration If both in & out are cancelled on same day – before allocation.
Dividend Reinvest Transactions	To be considered as an IN transaction only if the ref type is maintained as to be considered for net sales applicable computation
Non Daily Priced Fund Transactions	The unalloted transactions will be considered for the net sales computation on Price Date. The from price date or to price date which got derived on transaction save will be considered for the dilution levy breach value calculation.

Dilution Levy Batch for Fund Level

If Dilution Levy is selected, then the system applies the load only if the sum of transactions for the combination of unit holder, fund, and transaction type exceeds the breach factor (inflow/ outflow) for the corpus, even though all other criteria are satisfied. An EOD batch computes the aggregated net transaction amount at unit holder, fund, and transaction type level for dilution levy enabled fund.

If dilution levy limit of a fund is breached, then the system applies the dilution levy load is applied for specific or all transactions for that unit holder, fund and transaction type combination based on the Dilution Levy Applicable At.