7.10 Process Periodic Load Maintenance Detail

This topic provides the systematic instructions to maintain periodic loads.

The system facilitates the processing of trailing fees or management fees payable from any entity in the system to another entity. This trailing fee is set up in the system as a load in the Loads Maintenance.
  1. On Home screen, type UTDPERLM in the text box, and click Next.
    The Periodic Load Maintenance Detail screen is displayed.

    Figure 7-17 Periodic Load Maintenance Detail


    Description of Figure 7-17 follows
    Description of "Figure 7-17 Periodic Load Maintenance Detail"

  2. The Periodic Load Setup screen facilitates the mapping of the trailing fee (load) to a fund, and setting up the following details regarding the fee:
    • The period in respect of which the trailing fee is to be computed.
    • The From and To entities in respect of which the trailing fee will be paid out/received
    • The frequency at which the trailing fee is processed
    • The computation method (nature) of the fee
    • The event of application or action of the fee
    • The last processed date and the next date on which the fee must be processed
    • The number of decimals for the load
  3. Before you set up the details for a trailing fee load or periodic load, and apply it to a fund, it is desirable to ensure that the following information is already set up in the system.
    • The trailing fee that must be applied must be set up as a periodic load in the Loads Maintenance.
    • The fund that the load must be associated to must be an authorized fund.
    • The different entities which will be the payees or recipients in respect of the trailing fee must be set up in the system.
  4. A trailing fee / management fee is usually computed as a percentage of the holdings of the investor, based on the method of computation specified for the fee.
  5. Set up the fee to apply to the holdings of an investor in:
    • Any individual funds
    • Funds belonging to a load group
    • Funds part of a product or policy / plan portfolio.
  6. Proceed as follows to set up the trailing fee in the Periodic Load Setup screen.
    • Choose the Fund option to set up the trailing fee for a fund in the Fund/Product section in the top right portion of the screen. Choose the Product option to set up the trailing fee for a product. Select the Group option to set up the fee for a load group.
    • Select the ID of the fund, product or group for which you are setting up the trailing fee in the Fund / Product / Group ID field. Any loads that have already been mapped to the selected fund, product or group are displayed with the details in the grid portion in the middle of the screen.
    • Specify the dates that form the period in respect of which the computation of the load must be arrived at, in the Rule Effective Date From and To fields.
    • For funds, specify the load details in the Load and Load Details sections in the lowest part of the screen, and save the record.
    • For products, specify the load details in the Load and Load Details sections. Also, specify the underlying funds or groups for which the load must be applied, and then save the record.
  7. On Periodic Load Maintenance Detail screen, click New to enter the details.
    For more information on fields, refer to the field description table.

    Table 7-15 Periodic Load Maintenance Detail - Field Description

    Field Description
    Reference Number Display

    The system displays the reference number.
    Periodic Load Maintenance

    If you are defining the periodic fee to be applicable for a product, you must define the specific funds and /or groups in the product portfolio to which the fee would be applied. When you select the product in the Fund/Product/Group ID field, any groups or funds that are mapped to the product portfolio are displayed in these sections.

    To specify the funds or groups to which the fee must be applicable, use the arrow buttons to move the selected funds or groups from the Available Portfolios / Available Groups boxes to the Mapped boxes.

    Note: It is mandatory that you map all available portfolios to the groups.

    Fund/Product/Group Mandatory
    You can use this field to indicate whether the periodic fee is being set up to be applicable for a fund, a product or a group. The drop-down list displays the following values:
    • Fund
    • Product
    • Group
    Fund ID Alphanumeric; 12 Characters; Mandatory

    Specify the fund ID.
    Rule Effective From Date Date Format; Mandatory

    By specifying the two dates, indicate the period in respect of which the trailing fee computation must be arrived at.

    The system will allow backdating the periodic load Rule effective date for new loads for a fund. For funds where there is no load attached; a new load can be created with ‘Rule Effective Date’ as back date. This date cannot be less than the ‘First price declare date’ and ‘fund rule effective date’.
    Rule Effective To Date Date Format; Mandatory

    Specify the period in respect of which the trailing fee computation must be arrived at.
    Product ID Alphanumeric; 12 Characters; Optional

    Specify the product ID.
    Product Description Display

    The system displays description for the specified product based on the details maintained for at Product Fund Maintenance level.

    Group ID Alphanumeric; 12 Characters; Optional

    Specify the group ID.
    Group Description Display

    The system displays description for the specified group based on the details maintained for at Payment Group Maintenance level.

    ISIN Code Alphanumeric; 12 Characters; Optional

    Specify the ISIN Code for the periodic fee.

    If you specify ISIN code then system displays the fund ID and vice versa.
    Fund Name Display only

    The system displays description for the specified fund based on the details maintained for at Fund Maintenance level.

    Click Refresh button to refresh the details.

    Load The section displays the following fields.
    Load ID Numeric; 5 Characters; Optional

    Select the load that represents the trailing fee / management fee that is to be associated and processed for the fund, product or group, from the drop-down list.

    For funds where there is periodic load available and there is change in load information; then you should amend the load ID. After this maintenance, during EOD, the system will start accrual from the first accrual day of this payment cycle till application date/valid accrual date.
    Load Description Display

    The system displays description for the specified load based on the details maintained at Load Maintenance level.

    From Entity Type Alphanumeric; 1 Character; Mandatory

    Select the entities that are to be payees of the trailing fee.

    The ‘From’ entities could be any of the following:
    • Unit Holder
    • Funds
    • AMC
    • Distributor
    From Entity Type Description Display

    The system displays description for the entity types maintained as From Entity IDs based on the details maintained at Entity Maintenance level.

    To Entity Type Alphanumeric; 1 Character; Mandatory

    Select the entities that are to be recipients of the trailing fee.

    The ‘To’ entities could be any of the following:
    • Broker
    • AMC
    • Distributor
    • Unit Holder
    • Agent
    • Product Administrator
    • Agency Branch
    • Account Officer
    • IFA
    To Entity Type Description Display

    The system displays description for the entity types maintained as To Entity IDs respectively, based on the details maintained at Entity Maintenance level.

    Nature of Load Alphanumeric; 10 Characters; Mandatory
    Specify the method of computation to be used for the trailing fee represented by the selected load. This could be any of the following options:
    • Average Holdings
    • Quarterly Average Holdings
    • Latest Balance
    • Average of Opening and Closing Balance
    • Average Holdings Across Funds
    • Pro-rata of holdings across funds
    Nature of Load Description Display

    The system displays the method you need to use for the computation of trailing fee represented by the selected load.
    Action for Load Alphanumeric; 10 Characters; Mandatory
    Select the event at which the fee would be applied and computed. The possible options are:
    • Payout in Next Commission: If you select this option, the trailer commission payment would be processed according to the rules maintained in the Entity Commission Payment Setup as well as the payment frequency and payment details maintained in the Entity Payment Details. The settlement can be triggered using the EFT function or through check printing, based on the payment mode.
    • Report Trailing Commission: The commission payment data can be viewed as a report.
    • Adjust UH Balances: If you select this option, the Unit Holder balance gets adjusted accordingly and there will not be a broker commission payout/adjustment transaction.

      Note: If you select the option Adjust UH Balance, it is mandatory that you select the option Unit Holder against the field To Entity Type or From Entity Type.

    • Adjust and Pay Broker: Appropriate broker commission will be done prior to netting (if applicable) and adjustment transaction generation. The commission payout will be according to the Income Distribution Setup for the broker.

    Note: If you select the option Adjust and Pay Broker, it is mandatory that you select the option Broker against the field To Entity Type.

    Action Name Display

    The system displays the description for the event at which you need to apply and compute the field.
    Management Fee Load ID Alphanumeric; 10 Characters; Optional

    Management fee loads are always set up at a fund group level, and are applied based on the Assets Under Management (AUM), in respect of all the funds in the fund group.

    Management fee loads are set up with the Average Daily Balance computation method, with Accrual Frequency as Daily, and can only be set when the periodic load setup is at a group level.

    The load computation method (Nature of Load) for management fee loads can either be Simple Slab or Weighted Average.
    Load Description Display

    The system displays the description for the selected management fee load ID.
    Intermediary Alphanumeric; 1 Character; Mandatory

    In this field, you can indicate whether the periodic fee payment is to be made to the intermediary of the transaction that resulted in the periodic fee or to the default intermediary specified for the unit holder involved in the transaction that resulted in the periodic fee.

    If you are setting up periodic load for Agent, Agency Branch, Account officer or IFA, the Intermediary should be set to either Hierarchy or Transaction.
    • If the Intermediary is set to Hierarchy, the commission will be processed to the default entities maintained at SLA.
    • If the Intermediary is set to Transaction, the commission will be processed to the entities maintained at the Transaction level.

    In case of CIF Merger/ Hierarchy merger, Trailer commission will be processed to the respective entities till the merger and from the date of merger, the same is processed to the new entities.
    Intermediary Details Display

    The system displays the description of the intermediary to which you need to pay the periodic fee.
    Last Processed Date Display

    This indicates the date when the last payment was made.
    Sub Type Alphanumeric; 3 Characters; Optional

    Specify the sub type to map the transaction sub type created earlier (69A or 69B or 86A) for Fee/incentive Transaction (‘69’/’86’) for given periodic load setup.
    Load Details The section displays the following fields.
    Processing Frequency Alphanumeric; 1 Character; Mandatory

    Specify the frequency at which the load that represents the trailing fee must be computed in the system. The system will then automatically compute the trailing commission as part of End of Day Processing based on this frequency, and a report will be generated.

    By default, for daily accrual frequencies, the monthly accrual frequency is set; for other accrual frequencies, the processing frequency is deemed to be the same as the accrual frequency. The default option can be changed. If so, the processing frequency specified must always be greater than the accrual frequency.

    The following frequencies are possible:
    • Monthly
    • Quarterly
    • Half yearly
    • Yearly
    Processing Frequency Description Display

    The system displays the description for the selected processing frequency.
    No of Decimals Alphanumeric; 1 Character; Mandatory

    Specify the number of decimals for the periodic load. Typically, this must be equal to the number of decimals designated for the currency of payment. Trailer commissions are typically paid in the base currency of the fund.
    Next Date to Process Date Format; Mandatory

    When you are setting up a periodic fee for the first time, you must specify the date on which the fee is to be first processed.
    Round-off/Truncate Mandatory

    Select whether the computed load must be rounded-off or truncated from the drop-down list.
    Payment Lag Frequency Alphanumeric; 1 Character; Optional

    Specify the payment lag frequency from the option list.
    Payment Lag Frequency Description Display

    The system displays description for the specified payment lag frequency based on the details maintained in the system.
    Minimum Holding Period Numeric; 5 Characters; Optional

    You can indicate a minimum period for which the units must be held, before they can be considered for computation of the trailing fee. This value is reckoned in days. It is not mandatory to set a minimum holding period.

    If this value is not specified, all holdings during the trailer commission period are eligible for trailer commission.
    Accrual Frequency Alphanumeric; 1 Character; Mandatory
    Specify the frequency at which the fee must be accrued in the system. Any of the following frequencies can be set:
    • Daily
    • Monthly
    • Quarterly
    • Half yearly
    • Yearly
    Accrual Frequency Description Display

    The system displays the description for the selected accrual frequency.
    Last Accrual Date Display

    This indicates the last date on which the periodic fee was accrued.
    Last Accrual Application Date Display

    This indicates the last application date when the periodic fee was accrued.
    Next Accrual Date Display

    This indicates the next date when the periodic fee will accrue.
    FDAP Income Optional
    Select to indicate periodic load being distributed is FDAP income or not from the drop-down list. Following are the options available in the drop-down list:
    • Yes
    • No
    Payment Lag Numeric; 22 Characters; Optional

    Specify the payment lag to be applicable for the trailing commission fee.
    First Load To Be Computed
    Select the first load to be computed from AUM. Following are the options available in the list:
    • Trailer Commission
    • Management Fee

    By default, First Load to be Computed is Trailer Fee.
    Netted AUM for Second Load
    Select if second load has to be computed on netted AUM. Following are the options available in the list:
    • Yes
    • No

    If First Load to be Computed is Management Fee then while calculating Trailer Fee, system reduces the AUM by the Management Fee accrual amount and calculate Trailer Fee accrual.
    Reversal The section displays the following fields.
    Reversal Date Basis Alphanumeric; 1 Character; Mandatory

    In this field, you can specify whether the impact of transaction reversals must be affected from the transaction date (Reversal at Source) or from the reversal date (Reversal at Current). Depending upon the option you specify here, the basis units for trailer commission would be affected as of the date of reversal (Reversal at Current) or as of the date of the original transaction (Reversal at Source).

    If you opt for the Reversal at Source option, you can choose either the transaction date or the price date option.
    Reversal Date Basis Description Display

    The system displays description for the specified reversal date basis based on the details maintained in the system.

    In cases where the accrual frequency is Daily, and the Reversal at Source option is applicable, and a transaction is reversed, if the transaction date is earlier than the last accrued date for trailer commission, the system recalculates the daily trailer commission from the transaction date to the last accrued date.

    Also, in cases where the accrual frequency and payment frequency are different, and the Reverse at Source option is applicable, and a transaction is reversed with the transaction date being earlier than the last paid date, the holdings of such a transaction would have already been considered in the previous trailer commission computation. In respect of such a transaction, the system logs the following details, indicating that the transaction payment has already been done:
    • Fund ID and AMC ID
    • Distributor hierarchy details
    • Trailer commission last paid date
    • Original trailer commission amount accrued
    • Original transaction number
    • New transaction number
    • Original transaction value
    • Current value (zero in case of reversals)
    Others The section displays the following fields.
    Price Basis Mandatory
    Here, you can indicate the price basis for periodic load computation. The options are:
    • NAV
    • Component Base
    Vat Percentage Numeric; 5 Characters; Optional

    Specify a valid percentage you need to apply for the period load commission.
    Price Component Alphanumeric; 10 Characters; Mandatory if the Price Basis is Component Base

    If the price basis for periodic load computation is component based, then select the fund price component to be utilized for computation from the list. The list displays all the components belonging to the type ‘User Entered’.
    Basis for Units Mandatory

    In this field, you can indicate whether the trailing commission is to be based on settled units or all units (both provisional and settled) from the drop-down list.
    Include for Netting? Optional

    Select Yes from the adjoining drop-down list, if you need to net the fees or incentive amount. The system defaults the value as No.

    Holiday Rule for NAV Alphanumeric; 1 Character; Mandatory

    In this field, you can indicate whether the previous day’s NAV (Prior) or the following day’s NAV (After) is to be considered for market value calculation, if there is an intermediate holiday during the trailer commission period.
    Holiday Rule for NAV Description Display

    The system displays the description for the selected holiday rule for NAV.
    Trailer Commission Transaction Pickup Basis Alphanumeric; 1 Character; Mandatory
    In this field you can indicate the basis upon which the AUM for the trailer commission would be arrived at. The options available are:
    • Price date: All transactions with price date in trailing commission period and which have a non-zero holding in the trailer commission period are considered. The commission would accrue as of the price date. The AUM is computed as {Total units as of price date} * {NAV as of price date}
    • Transaction date: All transactions with transaction date in trailing commission period and which have a non-zero holding in the trailer commission period are considered. The commission would accrue as of the transaction date. The AUM is computed as {Total units as of transaction date} * {NAV as of transaction date}
    • Allocation date: All transactions with allocation date in trailing commission period and which have a non-zero holding in the trailer commission period are considered. The commission would accrue as of the allocation date. The AUM is computed as {Total units as of allocation date} * {NAV as of allocation date}
    • Dealing Date: All transactions with dealing date in trailing commission period and which have non-zero holding in the trailer commission period are considered. The commission would accrue as of the dealing date.
    Description Alphanumeric; 60 Characters; Optional

    Specify description for the specified trailing commission transaction pickup basis.
    Transaction Choose Basis Alphanumeric; Optional

    Specify the transaction choose basis details. Alternatively, you can select transaction choose basis details from the option list. The list displays all valid transaction choose basis maintained in the system.
    Txn Choose Basis Description Display
    The system displays the description for the selected transaction Choose basis value as follows:
    • Methodology 1 - Subscription and Redemption for trade date, T, is only accounted for Total Units on T + 1 (Where T + 1 includes all non-trading day)
    • Methodology 2 - Subscription and Redemption for trade date, T, is only accounted for Total units on T + 1 (where T + 1 excludes all non-trading day)
    • Methodology 3 - Rejection for trade date, R, is accounted for Total units on R – 1 (where R-1 includes all non-trading day)
    Threshold on Ongoing Fee Alphanumeric; 30 Characters; Optional

    Specify threshold amount for ongoing fees, if the load type mapped is ‘ROA’ load.

    The system compares the value specified with the cumulative AUM of the client to determine the Trailer fees to be charged.
    Trailer Comm Aum Slab Basis Mandatory
    Select a valid basis system to pick up AUM to determine the trailer commission load slab from the drop-down list. The list displays the following values:
    • UH-Product-Policy-Fund-Level
    • UH-Product-Policy-Level
    • UH-Product-Level
    • UH-Level
    • CIF- Product-Level
    • CIF- Level

    You can not change the AUM basis specified for trailer commission in the accrual cycle after it is defined.
    Fund Load Details The section displays the following fields.
    Fund ID Alphanumeric; 12 Characters; Mandatory

    Specify the fund id. The adjoining option list displays valid fund ids maintained in the system. You can choose the appropriate one.
    Load ID Numeric; 22 Characters; Optional

    Specify the load id. The adjoining option list displays valid load ids maintained in the system. You can choose the appropriate one.
    Management Fee Load ID Numeric; 22 Characters; Optional

    Specify the load id of the management fee. The adjoining option list displays valid management fee load IDs maintained in the system. You can choose the appropriate one.
    Transaction Category The section displays the following fields.
    Transaction Category Alphanumeric; 1 Character; Mandatory

    Specify the transaction category. Alternatively, you can select transaction category from the option list. The list displays all valid transaction category maintained in the system.
    Description Display

    The system displays the description for the selected transaction category.