FA Fund Management 1.10 - Release notes

Many funds have subscription and redemption fees in use, and it is common to provide discounts for some clients. Now you can set up FA Fund Management app to credit the fees automatically during NAV acceptance. This enables you to use automatic order execution on your orders when you want to automatically apply transaction fees.

You can configure your share classes to have percentual subscription and/or redemption fees by default. It is also possible to define a minimum amount in share class currency for both transaction fees.

You can set a discount for some of your clients in the client's portfolio for either of the fees or for both of them. If some of your clients do not have to pay any transaction fees you can set a discount to 100%. The discounts apply to all subscriptions and redemptions the client makes to any of your funds.

You can override the default fees and portfolio discounts by defining a fee in the subscription or redemption order – add a percentage in the Internal info field or add the fee amount directly in the fee field.

Learn more: Transaction fees for a fund in FA User guide.

So far FA Fund Management has supported unit-based orders and all trade amount-based orders were handled as gross trade amount-based orders. You can now use both the gross trade amount-based and the net trade amount-based orders.

When you use gross trade amount as an execution method, your trade amount excluding costs is fixed, and trade order units are calculated based on the NAV while accepting NAV. Costs are added on top of the fixed trade amount.

When you use net trade amount as an execution method, your trade amount including costs is fixed, and trade order units are calculated based on the NAV while accepting NAV. Costs are calculated during the NAV acceptance.

With net trade amount you know the exact sum you get into your account after the redemption or you know what sum will be credited from your account.

It is now easier to understand which currency the values are shown in the views. This helps especially if you handle several funds with different currencies or have funds with multiple share classes with different currencies.

Currency information is added to following views: List of funds pane, Fund details pane, Share class details pane and NAV window.

Learn more: View fund information, Fund details pane, Share class details pane and NAV window in FA Fund Management reference.Fund details paneShare class details paneNAV window

Fund companies use swing pricing in different ways: they can include the swing adjustment in NAV or not. The choice is sometimes based on a country's legislation. Before, you could only have swing adjustment included in NAV. Now, we implemented two different ways of using swing adjustment.

You can choose to use unswung or swung NAV as your Official NAV, the NAV you publish. Official NAV is used in reports and in valuing positions. The settings are available in the Fund wizard, Swing pricing tab. Your choice (swung or unswung NAV) is shown as Official NAV everywhere in the application.

We made some changes in terminology to follow the market practice. "Swing percentage" is changed to "Swing factor" in the Fund wizard. We use the term "Swung NAV" to describe the NAV which is adjusted with the swing factor, and "Unswung NAV" for NAV which isn’t.

Learn more: Apply swing pricing in FA Fund Management reference.

Some funds use performance fee equalization. Equalization can be used when a high-water mark is set less frequently than NAV is calculated and subscriptions and redemptions accepted. For example, a high-water mark is set once a quarter and NAV is calculated monthly.

FA Fund management now supports equalization with a contingent redemption method. Equalization is used to prevent shareholders from getting a free ride or suffering from a clawback. When NAV calculation is done the fees are accrued from the last crystallization. You can set your fund’s crystallization schedule in Fund wizard. The fees are always capitalized at the crystallization point.

In this model, subscriptions are executed with GAV. When subscription orders are accepted, the system creates compensation orders if the high-water mark differs from GAV. If the unit price is below a high-water mark, an equalization debit is created for preventing a free ride. If the unit price is above a high-water mark, an equalization credit is created for preventing clawback. At the crystallization point, the compensation orders are executed.

If a shareholder has open compensation orders at the crystallization point, those are executed if the high-water mark has risen. At the crystallization point, the crystallized fee is paid by the shareholder to the fund by redeeming the shareholder’s units if the subscription was made when the unit price was below the high-water mark. If the subscription was made with a higher unit price than the set high-water mark the shareholder receives units from the fund.

Redemptions with open compensation orders are not automated and you need to handle them manually.

Learn more: Workflows and NAV statuses, Create a fund, Add share classes in FA Fund Management reference.