2.1.12.1 Enter Fund Formulae

This topic provides information on entering fund formulae details.

The following considerations must be kept in mind while entering Fund Formulae:

• If a formula is entered for a particular component, the formula cannot contain the component itself as an operand. For instance, if NAV is one of the components, and a formula is being specified for NAV, it cannot contain NAV as one of the factors.
• A component cannot be part of the factor (operand) and result for any other component. For example, if the formula for the component NAV contains the component TxnBP01 as an operand, then the formula for the component TxnBP01 cannot contain NAV as an operand.
• Once you enter a formula, it must be tested successfully for it to be saved and applied. To test a formula, click the Test button. The Fund Price Component screen is opened and you must specify a component value that will be used in computing the results of the formula.

The maintained fund formula for that fund will be applicable to all the prices in all allowed currency of expression for the Fund along with FBC.

The formula maintained for OFFER component as OFFER = NAV+3%of NAV (or the formula maintained can be NAV+2). This formula will be considered to derive the OFFER price component in FBC and other maintained Fund Price currencies for that fund using the NAV entered for respective currencies. This will be similar for other price components maintained in Fund Formula.

The price calculation method must be identical for each transaction currency within each share class. Trailer commission will be calculated in FBC.

In case of load held as amount, the system to apply the COE conversion factor and also the floor, ceiling and return value held in FBC will also use COE currency factor. All the amount values maintained in Load maintenance will be in FBC and the system will use CEO conversion factor for amount based load.

Definition of Additional Components with Fund Prices

You can record additional components to be used for reporting along with the fund price, such as tax information, interim profit, stock profit (capital gains), accumulated gains, and so on. For instance, you may wish to include tax information as part of the Fund Price information, but you may wish to indicate that the tax information you provide must not be used for actual price computation.

Note:

This feature is only available if your installation has specifically requested for it. An exhaus\u0002tive note on this feature is found in the Annexure. The discussion in this chapter pertains only to definition of fund formula using components used in fund price computation.

System Logic to Derive the Price Currency

You can derive the applicable fund price currency for currency of expression fund transactions as follows:

When TBC= fund base currency then price currency will be FBC itself. No FX will be required. This is applicable for subscription, redemption and switch transactions.

When a trade is placed in a currency (TBC) that is the allowed fund price currency for the fund then Price currency will be respective fund price currency. No FX will be required. This is applicable for Subscription, Redemption and Switch transactions.(TBC = FPC then price CCY will be FPC)

When a trade is placed in a currency that is neither the fund base currency nor an allowed fund price currency for the fund, Price Currency will be FBC. FX will be required between Transaction Currency and FBC. This is applicable for Subscription and redemptions. (TBC ≠FBC or FPC; then Price CCY will be FBC.)

Table 2-55 Scenarios

Scenarios	Transaction Type	TBC	FX	Resultant Price CCY
TBC= FBC	Subscription, Redemption, Switch	FBC	Not Applied	FBC
TBC= FPC	Subscription, Redemption, Switch	FPC	Not Applied	FPC
TBC≠FBC or FPC	Subscription, Redemption, Switch	≠FBC or TBC	Yes TBC to FBC	FBC