Business Rules

Note: For information about business rules that apply to all endowment transaction e-docs, see Standard Business Rules.

In addition to the standard business rules for endowment transactions, the following business rules apply to holding adjustment transactions:

•      When you initiate the e-doc, the system sets the Transaction Sub Type Code to ‘Non-Cash.’ You cannot change this value.

•      You must enter or select a valid, active security in the Security Details tab. Only one security record may be inserted in each transaction.

•      The security entered must not have a liability class code.

•      When you submit or save the e-doc, the system sets the security line type code to match that of the transaction lines entered.

•      After you enter a security, the system displays the associated security name and class code, class code description, tax lot indicator, and security transaction code.

•      You must enter a valid, active registration code.

•      You must enter an Etran code for the transaction line.

•      You may enter data into either the Increase or Decrease transaction lines, but not both.

•      For each transaction line entered, you must specify whether it is to affect securities held in income or principal.

•      You must enter a number greater than zero for either the unit adjustment amount or the transaction amount in the transaction line.

•      After you add a transaction line, the system creates the appropriate entries in the Tax Lot Lines tab. If the transaction line units are edited or the transaction line is deleted, the records in the tax lot lines tab are corrected automatically.

•      You may delete tax lot lines, but at least one tax lot line must remain in the transaction.

•      As a tax lot line is deleted, the system recalculates the unit distribution among the remaining lots.

•      This e-doc is reversible.

•      If the system is unable to locate tax lot records to match the criteria set for the Security/ Registration Code/ KEMID/ Income or Principal indicator, the transaction cannot proceed. To alert you to this condition, the system highlights the KEMID in the transaction line.

If you enter a value in the Unit Adjustment Amount field, the following business rules apply:

•      You cannot enter a value into the Transaction Amount field. The system generates an entry for this field as a result of the calculations made for the tax lot lines.

•      When the transaction line is created, the system retrieves from the holding lot all appropriate tax lot records. The system also creates a record for each appropriate holding lot and calculates and displays the lot holding cost as follows:

For each lot in the Tax Lot Lines tab, multiply the unit adjustment amount by the number of units in the lot.

If you enter an amount in the Decrease section, the value is negative. If you enter an amount in the Increase section, it is positive.

After the holding cost for the lot lines has been calculated, the system displays the absolute value of the total holding cost in the Transaction Amount field and generates the proper total values for the Transaction Lines tab.

If you enter a value in the Transaction Amount field, the following business rules apply:

•      No entry in the Unit Adjustment Amount field is allowed.

•      No calculated value will be displayed in the Unit Adjustment Amount field.

•      The system distributes the value in the Transaction Amount field proportionately among the tax lots held by the KEMID based upon the number of units in each lot.

•      When the transaction line is created, the system retrieves from the holding lot all appropriate tax lot records. The system also creates a record for each appropriate holding lot and calculates and displays the lot holding cost as follows:

From transaction amount, distribute the value based upon the number of units in the original lots as a percentage of the total units of the security tax lots in the record held by the KEMID.

If you enter an amount in the Decrease section, the value is negative. If you enter an amount in the Increase section, it is positive.

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