2.1.6.3 Min or Max Holding Check

This topic provides information on min/max holding check tab details.

You can indicate the minimum/maximum holdings balance that is required for redemption, switch or transfer transaction, for a CIF or an individual unit holder, in the fund. The minimum holdings value can be specified either as an amount, number of units, or redeemable value of units.

1. Click on Min/Max Holding Check tab in General Operating Rules screen to specify the details.
   The The Min/Max Holding Check details are displayed in General Operating Rules screen.

   Figure 2-8 Min/Max Holding Check

   
   

   
   Description of "Figure 2-8 Min/Max Holding Check"

   
   

   As part of the minimum holdings options, you can also indicate whether the holdings considered for validation are those of all unit holders under a CIF, or for an individual unit holder.

   Note:

   The above check is not validated online during transaction capture or authorization. When there are transactions into a fund violating the minimum holdings validation, the system logs an exception in the Pre-End of Day Check screen. During the End of Day processes, the system allocates the transactions, logging the exceptions in respect of them.

   For more information on fields in the screen, refer the below table.

   Table 2-12 Min/Max Holding Check

   Field	Description
   Minimum Holdings Amount	Numeric; 18 Characters; Mandatory if Minimum Holdings Indicator is specified Specify the minimum redeemable value of holdings in the fund, for a redemption, switch or transfer transaction involving a CIF or individual unit holder. Example For the Royal Trust Growth Fund, you have selected the ‘Amount’ option as the Minimum Holdings Indicator for redemption, switch and transfer transactions. You have also specified the Minimum Holdings Amount value as 1200 USD (the fund base currency is USD). The minimum holdings validation is required to be enforced for individual unit holders and not for CIFs. Therefore, the redeemable value of total number of units held by an individual unit holder, in the Royal Trust Growth Fund must exceed or equal 1200 USD, for a redemption, switch or transfer transaction involving the unit holder.
   Minimum Holdings Indicator	Mandatory Select the basis upon which the minimum holdings check is performed from the drop-down list. The list displays the following values: Amount: The value of holdings (at redemption price). If you choose this option you must specify the minimum amount in the Minimum Holdings Amount field. If the check is to apply at CIF level, the redeemable value of units held by all unit holders under the CIF in the fund is checked against the Minimum Holdings Amount. Units: The number of units held. If you choose this option you must specify the minimum number of units in the Minimum Holdings Units field. If the check is to apply at CIF level, the total number of units held by all unit holders under the CIF in the fund is checked against the Minimum Holdings Units. Lower of Amount/Units: The minimum amount specified or the redeemable value of minimum units specified, whichever is lower. Higher of Amount/Units: The minimum amount specified or the redeemable value of minimum units specified whichever is higher. Not Applicable: The minimum holdings validation is not performed if you choose this option. If you choose either of the last two options (Lower of Amount/Units or Higher of Amount/ Units), you must specify the applicable minimum amount in the Minimum Holdings Amount field as well as the applicable minimum number of units in the Minimum Holdings Units field. Also, in either case, the redeemable value of the total number of units held by all investors under the CIF is considered for validation, if the check is to apply at CIF level.
   Minimum Threshold limit	Numeric; 5 Characters; Optional Specify the percentage value to be applied on minimum balance amount or units setup here.
   Max Lock-in Period for Gain (Days)	Numeric; 4 Characters; Optional Specify the maximum lock-in period beyond which if the subscription is redeemed gains would be passed over to the Unitholder and so IOF and IRRF taxes will be applicable. This should be greater than or equal to the Min Lock-in Period. Note: When a transaction is redeemed within the Lock-In period, redemption happens at the lowest applicable NAV as on date of Subscription or on the date of Redemption.
   Default Lock-in Period for Gain (Days)	Numeric; 4 Characters; Optional Specify the default lock-in period within which if the subscription is redeemed no gains would be passed over to the Unitholder and so IOF and IRRF taxes will not be applicable. Note: The default lock-in period should be within the minimum and maximum lock in period.
   Minimum Holdings Units	Numeric; 27 Characters; Mandatory if Minimum Holdings Indicator is specified Specify the minimum number of units required to be held by an individual unit holder, or a CIF, in the fund, for a redemption, switch or transfer transaction. Example For the Carey Bugle Growth Fund, you have selected the Units option as the Minimum Holdings Indicator for redemption, switch and transfer transactions. You have also specified the Minimum Holdings Units value as 1000. The minimum holdings validation is required to be enforced for individual unit holders and not for CIFs. Therefore, the total number of units held by an individual unit holder, in the Carey Bugle Growth Fund must equal or exceed 1000 units, for a redemption, switch or transfer transaction involving the unit holder. A note on the minimum holdings validation If the Minimum Holdings Indicator selected is Lower of Amount/Units, the redeemable value of the specified Minimum Holdings Units is arrived at, and compared with the Minimum Holdings Amount specified. The lower of the two values is considered as the minimum holdings value against which the minimum holdings validation would be made. Similarly, if the Minimum Holdings Indicator selected is Higher of Amount/Units, the redeemable value of the specified Minimum Holdings Units is arrived at, and compared with the Minimum Holdings Amount specified, and the higher of the two values is considered as the minimum holdings value against which the minimum holdings validation would be made. Example For the Burton Carey Growth Fund, you have selected the Lower of Amount/Units option as the Minimum Holdings Indicator for redemption, switch and transfer transactions. You have also specified the Minimum Holdings Amount value as 1200 USD, and the Minimum Holdings Units value as 1000 units. The minimum holdings validation is required to be enforced for CIFs, and not for individual unit holders. To arrive at the minimum holdings value against which the validation would be made, the redeemable value of 1000 units is computed, at the redemption price. If the redemption price is 0.8, the redeemable value = 1000 * 0.8 = 800 USD. The redeemable value obtained (800 USD) is compared with the Minimum Holdings Amount specified (1200 USD). Since the Minimum Holdings Indicator chosen is Lower of Amount/Units, the minimum holdings value to be validated against, is 800 USD. Therefore, the redeemable value of total number of units held by all unit holders under a CIF, in the Burton Carey Fund must equal or exceed 800 USD, for redemption, switch or transfer transaction involving a CIF. If the Minimum Holdings Indicator were selected as Higher of Amount/Units, the higher value (1200 USD) would be considered as the minimum holdings value against which the validation would be made. Therefore, the redeemable value of total number of units held by all unit holders under a CIF, in the Burton Carey Fund would have to equal or exceed 1200 USD, for a redemption, switch or transfer transaction involving a CIF.
   Minimum Holdings Apply For	Optional Select whether the minimum holdings check is applicable for CIFs, or for individual unit holders from the drop-down list. The list displays the following values: CIF Unit Holder If you select CIF option, the redeemable value of the total number of units held by all unit holders under the CIF in the fund is considered for validation.
   Min Lock-in Period for Gain (Days)	Numeric; 4 Characters; Optional Specify the minimum lock-in period applicable for the fund. During subscription transaction, the lock-in period specified at the transaction level should be equal to or greater than the minimum period indicated here.