3.10.1.1 Processing Cancellations

This topic provides information about processing cancellations in the FCIS Cancel Transaction Detail screen.

Cancellations are processed as follows:

• The cancellation is processed based on the fund-level cancellation parameters, as follows:
  • The price basis for the cancellation depends on the Cancellation Price Basis defined in the fund rules.
  • The fund load mapping for cancellation would have been set up similar to the loads applicable for the initial subscription, with entity types reversed.
• Upon authorization, the cancellation creates an underlying redemption transaction with transaction date as the cancellation date and units equal to the original allotted units of the subscription transaction.
• Upon authorization of the cancellation, the original subscription cannot be amended or reversed. Also, the original subscription cannot be reversed or aged against any other redemption.
• The cancellation transaction is a sub type of redemption transaction.
• The Administration fee for cancellation is captured as a transaction time fee.
• If the original transaction has already been redeemed out, the System records an error.
• If the original transaction has not been settled (that is, there are provisional units), there is no payout due to the generated redemption, which is generated as confirmed and paid.
• The load amount for the redemption is the sum of loads due to refund of the original load amounts.
• Allocation of the cancellation age out the original units allotted. The settlement amount after this allocation is the market value of cancellation.
• Market value of cancellation is taken to be:

Units allotted * NAV / Bid / Offer price + Front end load on original purchase

• The cancellation amount (settlement amount) due to the transaction is determined as shown below:

Table 3-51 Case details

Case	Description
Market Value more than or equal to original investment amount	Market value less than original investment amount Consideration of original Subscription price as cancellation price during allocation
Cancellation amount is equal to the orignal investment amount In case of a price increase, the difference between the cancellation amount and original investment amount is accounted to the fund.	Cancellation amount is equal to the Market Value. In this case, the difference between the cancellation amount and the original investment amount is Due to Fund Manager.