9.2 CMA Operations

This topic provides information on CMA Operations.

CMA Operations

The various operations in a CMA are as follows:

• When an initial investment in a policy takes place, the ongoing fees for the investment are calculated as part of the allocation process. These are deducted proportionately from the investment made for each fund and invested into the CMA.
• When a top-up transaction in a policy takes place, the system calculates the projected ongoing fee payable for a year and compares this with the balance in the CMA Fund. If the projected fee is greater than the CMA fund value, the difference is deducted from the investment proportionately.
• The system does this by overriding the ongoing fee record with the updated return value. The updated return value is calculated as follows: Updated Return Value = ((Projected Amount – CMA fund market value)/Projected amount)*Original Return Value.
• The system carries out monthly checks for sufficient funds in the CMA to cover the ongoing fee for a full year. In case of a deficit, the system proportionately switches the deficit amount from other funds into the CMA.
• The system also carries out monthly checks for sufficient funds in the CMA to cover the annuity for a full year. In case of a deficit, the system proportionately switches the deficit from other funds into the CMA.

Let us consider the following examples:

The fee set-up in an AMC is defined below:

Rate L4 – Ongoing Admin Fee per annum

Table 9-1 Rate L4 – Ongoing Admin Fee per annum

Slab (in ZAR)	Rate (in %)
0 - 100,000	0.5
100,000 – 500,000	0.25

Table 9-2 L5 – Ongoing Broker Fee per annum

Slab (in ZAR)	Rate (in %)
0 - 100,000	0.5
100,000 – 500,000	0.25

Table 9-3 L1 – Initial Admin Fee

Slab (in ZAR)	Rate (in %)
0 - 100,000	2.5
100,000 – 500,000	1.5
500,000 – 1,000,000	1

Table 9-4 L2 – Initial Broker Fee

Slab (in ZAR)	Rate (in %)
0 - 999,999,999	2.0

Operate CMA Generate Switch Transaction Batch

You can run this batch either on a periodic basis or manually. You can invoke CMA Generate Switch Transaction screen by typing UTDCMABP in the text box, and click Next.

Figure 9-1 CMA Generate Switch Transaction

Description of "Figure 9-1 CMA Generate Switch Transaction"

If you wish to run this batch on a periodic basis during EOD, you can do so by defining the following System Parameters.

• CMA Switch Date: You can specify the date on which you would want the batch run for the first time. For example, you may choose to run it on 2nd January.
• CMA Switch Freq: You need to specify the frequency at which you would like the batch to be run. The system uses this information to run the batch from the second time on. For example, if you have specified a monthly frequency, the system checks every day to see if the current date matches the date defined by the CMA Switch Date and Freq. It then runs the batch when the date is 2nd February.

You can execute the CMA Generate Switch transaction Batch manually when ever you choose. The manual execution is independent of the parameters you may have specified above.

Note:

During a top-up or switch transaction for a policy having funds in different currencies, the load amounts for the individual funds are converted to policy base currency before the CMA transaction.