4.41.4 Recomputing NAV

This topic provides information about recomputing NAV.

The system will recompute the yield from the NAV effected period if NAV used for yield computation is corrected. If the revised NAV does not meet the yield, then

• If switch back transaction has not been allocated, it will be reversed by system
• If the transaction has been allocated, it will be reversed subject to availability of units in source fund.
• NAV correction should not regenerate the switch back transaction based on corrected NAV, only reversal will happen.
• Reversals will be logged in a data source for tracking purpose.
• Auto switch back will be enabled.

The system will re-compute the yield based on the revised NAV and compare with the revised NAV and if the revised NAV meets the yield, F2 will not be generated and should be handled operationally by capturing through Switch transaction screen (UTDTXN04). Such transactions will not be subject to short trade,

Example

Table 4-52 Example of Recomputing NAV

Txn No:	Fund	Transaction Date	NAV	Units
PSWI01	EQF1	8-Jan-16	10	1000
PSWI02	EQF1	8-Feb-16	11	1000
PSWI03	EQF1	8-Mar-16	12	1000

Assume the yield % maintained is 30%. On 25-Mar-2016 NAV has reached 13 and yield is met for PSWI01 and a switch back transaction is generated on 26-Mar-2016

If a NAV correction happened for 25-Mar-2016 NAV on 28-Mar-2016;

Case 1: If NAV is corrected to 12.5, recomputed yield will not meet the yield % maintained;

The system will reverse the transaction generated on 26-Mar-2016,if source fund has units available.

The reversed units will be considered for yield computation from 29-Mar-2016.

Case 2: If NAV is corrected to 13.5, recomputed yield will still meet yield % maintained. So no action to be taken as the switch back transaction was already generated on 26-Mar-2016.

Assume the yield % maintained is 30%. On 25-Mar-2016 NAV has reached 12.5, since yield is not met for any inflow no switch back transaction is generated on 26-Mar-2016.

If a NAV correction happened for 25-Mar-2016 on 28-Mar-2016, system will not be re-computing the yield based on new NAV value.