2.1.23 Process Holding Limit in Currency of Expression

This topic provides information on processing holding limit in currency of expression details.

The system will validate holding limit for fund price currencies for the outflow transactions only if the limits are maintained in the general operating rules (Fund Price Currency Tab) and accordingly generate warning message for the outflow transactions.

If the transaction base currency is the unit holders’ currency of expression; then TBC should be validated against the Unit Holders’ Holdings/balance and the fund’s minimum holdings/ balance in that currency of expression to conclude whether or not the minimum holdings/ balance amount has been breached.

If the transaction base currency is a fund price currency for the fund, but not a unit holders’ currency of expression, and if limits are maintained for the fund price currency then TBC should be validated against the Unit Holders’ Holdings/balance and the Fund’s minimum holdings/balance in FPC to conclude whether or not the minimum holdings amount has been breached.

If the transaction base currency is a Fund price currency for the fund, and limits are not maintained, then the transaction amount is to be converted into the FBC (based on the latest price) and should be validated against the Unit Holders’ Holdings/balance in FBC and the Fund’s minimum holdings in FBC to conclude whether or not the minimum holdings/balance Amount has been breached. The system will use COE factor in this case.

If the transaction base currency is FBC; then that amount should be validated against the unit holders holdings/balance in FBC and the fund’s minimum holdings in FBC to conclude whether or not the minimum holdings amount has been breached.

If the transaction currency is neither the FBC nor a FPC nor unit holders’ currency of expression, then the amount is to be converted into FBC based on the exchange rate and then validate against the UHs holdings in FBC and the fund’s minimum holdings in FBC to conclude whether or not the minimum holdings amount has been breached.

If the transaction currency is neither the FBC nor a FPC nor unit holders’ currency of expression, then the amount is to be converted into FBC based on the exchange rate and then validate against the UHs holdings in FBC and the fund’s minimum holdings in FBC to conclude whether or not the minimum holdings amount has been breached. The system will validate holding/balance limit for FPC for all modes of transactions (outflow transaction) i.e. manual inputs and uploads as well.

The UH/CIF balance = UH fund balance * declared NAV in FBC

The Min/Max holding check is maintained in the Fund Price Currency tab. The values for minimum holding indicator, minimum threshold limits and minimum holding apply for will be looked at what is maintained for fund base currency at the GOR. In case values are not maintained here then it will be same logic as is for fund base currency.

The system will perform the following checks for the different values maintained for minimum holding indicator:

• Case 1:

  Minimum holdings indicator =Amount

  Balance to be checked = minimum holding amount + (minimum holding amount * threshold percentage)

  If UH/CIF balance is less than or equal to the balance to be checked, then the system will display warning message as The unit holder balance has reached the threshold value.

  If UH/CIF balance is 0 then the system will display warning message as This is a terminating transaction, Unit holder balance will be Zero.

• Case 2:

  Minimum holdings indicator =lower of amount/units

  Balance to be checked = least of minimum holding amount and (minimum holding units * declared NAV in currency of expression) + (least of minimum holding amount and (minimum holding units * declared NAV in currency of expression)) * threshold percentage)

  If UH/CIF Balance is less than or equal to balance to be checked then the system will display warning message as The Unit holder balance has reached the threshold value.

  If UH/CIF balance is 0 then the system will display warning message as This is a terminating transaction, Unit holder balance will be Zero.

• Case 3:

  Minimum holdings indicator = higher of amount/units

  Balance to be Checked = higher of minimum holding amount and (minimum holding units * declared NAV in currency of expression) + (higher of minimum holding amount and (minimum holding units * declared NAV in currency of expression)) * threshold percentage)

  If UH/CIF Balance is less than or equal to balance to be checked then the system will display warning message as The Unit holder balance has reached the threshold value.

  If UH/CIF balance is 0 then the system will display warning message as This is a terminating transaction, Unit holder balance will be Zero.

  If you try to amend an existing fund or add new currencies (fund price currencies-FPC’s) and prices are not maintained/available for the new fund price currencies and the same currency is used for redemption transactions then system will display warning message while saving the transactions.