1.1.1 Automatic Allocation of Transactions

This topic provides information about transactions that are automatically picked up.

The transactions that are automatically picked up by the End of Day processes for allocation on any business day include:

• Transactions entered and authorized the same day
• Backdated authorized transactions
• Transactions with mode of payment as cash
• Transactions with mode of payment as check / credit card/demand draft / transfer, where the payment instrument has been cleared and the clearing has been authorized on the given day
• All other transaction types

In a fund, if allocation of check / credit card / transfer payment transactions is designated to be treated on par with cash payment transactions, then the units in respect of transactions with these payment modes are allocated on a provisional basis on the same business day, even if the instrument is not cleared on that day.

The provisionally allocated units are then moved to the unit holder’s confirmed unit balance on the day the instrument is cleared, and the clearing authorized.

Further, if so designated, the price reckoned for allocation of check payment transactions is the prevalent price on the date of clearing.

Price Lag

For both cash-based and non-cash based transactions, if a price lag has been defined for the transaction type in the Transaction Processing Rules, the price lag days are considered based on either the fund calendar or the actual calendar, depending upon the Price Lag Basis specification in the Transaction Processing Rules.

Allocation Lag

For all transactions, if an allocation lag has been defined for the transaction type in the Transaction Processing Rules, the allocation lag days are considered based on either the fund calendar or the actual calendar, depending upon the Allocation Lag Basis specification in the Transaction Processing Rules.

Consider the following example to understand the allocation lag:

The GROWTH fund has an allocation lag of 2 for IPO transactions. This means that the system should allot IPO transactions that are entered (or which have been entered with the transaction date) 2 days before the current system date. The allocation lag days are considered as of the Fund Calendar or the actual calendar, depending upon the allocation lag calendar basis defined in the Transaction Processing Rules for IPO transactions for the fund.

If the current system date is 15th of December 2002 and the allocation lag calendar basis is actual calendar, then all IPO transactions of GROWTH fund that were entered on or before 13th of December 2002 will be allotted. If the allocation lag for IPO Subscription transactions were 3 for GROWTH fund all transactions on or before 12th of December 2002 would be allotted.