All rules for valuation affect the edit screen only. When a new security is created, the unit value is automatically set at 1. Typically a marketable security will have its unit value updated as a part of a nightly process which pulls information from an outside pricing source. For those securities that are valued through the current market value (alternative investments), that information is only available periodically and, at the onset, is equal to the carry value. Therefore, updating the unit or market valuation is accessible only through the edit screen.
Rules regarding income rates affect the calculations for anticipated income.
The following business rules apply to security transactions:
The Security ID is nine alpha or numeric characters. When you create a new security record, enter only the first eight digits. The system calculates the ninth and displays a message confirming the value.
When editing a security, you may change the class code.
If the security class code for the new security record has a Security Accrual Method value of 3, 6, B, M or T, you must enter data into these fields:
o Issue Date
o Maturity Date
o Interest Rate or Amount
o Income Pay Frequency
If the class code for a security has a class code type of Alternative Investment, an entry in the Commitment Amount field is required.
If the class code for a security has a class code type of P (Pooled Funds), you cannot change the unit value and value date on this e-doc. This restriction ensures that the unit value in the Security record matches the unit value stored in the corresponding Pooled Fund Value record with the latest value effective date.
If the security has a class code type of P (Pooled Funds), you cannot change the value in the Interest Rate or Amount field on this e-doc. The system automatically updates this value when the distribution amount in the pooled fund value is updated. The value is calculated as follows: the amount of the distribution is multiplied by the number of times per year that the institution will distribute income to the account holders.
If the class code for the security has a valuation method of U (Unit Value), you must enter a value in the Unit Value field but no entry is allowed in the Market Valuation field.
If the class code for the security has a valuation method of M (Market Value), you must enter a value in the Market Valuation field but no Unit Value entry is allowed.
The default unit value for a new security is 1 except for liabilities, which default to negative 1 (-1).
The unit value must always be greater than or equal to zero except for liabilities, which are always -1.
After you change the Unit Value entry and the change is accepted by the system, the system automatically moves the old date from the Value Date field to the Previous Unit Value Date field.
After the Unit Value field is changed and the change is accepted by the system, the system automatically moves the old value from the Unit Value field to the Previous Unit Value field.
In the Unit Value Source field, the system displays the name of the source of the most recent change to the Unit Value or Market Valuation field. This information must be inserted manually: it is not system generated. If the change is a result of input from a pricing file from an outside source, however, the file update program populates this field automatically.
Calculation of the next income pay date is based upon the process date in the System Values table and the security income pay frequency code selected for the payment. This calculation is updated as a result of the Roll Frequency Dates batch process.
Units Held represents the total units of the security held by the organization. The system changes the entry as a result of transaction processing that occurs during the Post E-Docs batch process. The units held number is defined by your institution. This number may reflect up to five decimal positions to allow for fractional shares.
The security carry value is automatically changed during transaction processing in the Post E-Docs batch process.
The entry in the Security Carry Value field is restricted to two decimal places and is stored as such. When a transaction generates a change to the field, the change reflects the exact amount of the carry value of the transaction as calculated and rounded according to standard KEM rules.
The system changes the entry in the Last Transaction Date field each time the number of units and/or carry value is modified as a result of transaction processing. The date always reflects the process date in the System Values table at the time the transaction was posted during the Post E-Docs batch process.
When you change the dividend amount, the system multiplies the changed value by 4, enters the result rounded to five decimals into the Interest Rate or Amount field, and changes the Last Income Change Date entry to reflect the current process date.
The system derives the Reporting Group entry from the class code of the security.
The Accrual Method entry is derived from the class code of the security.
o If the security class code has a valuation method of U (Units), you must enter a unit value. An overnight batch process updates the market value based upon this new value.
o If the security class code has a valuation method of M (Market), you must enter a market valuation for the security. The system then calculates the new unit value with this formula: Market Valuation divided by Units Held = new Unit Value.
Entry in the Next Fiscal Year Distribution Amount field is valid only for securities with a Class Code Type of P (Pooled Funds).
As a part of the KEM Batch Update Holding History process, the field Next Fiscal Year Distribution Amount is automatically updated to zero at fiscal year end.
For the Security Detail Inquiry screen and for the Security Maintenance Document screen in edit mode, the value in the Market Value field equals the sum of the holding market value for all records for the security.