Entering Transactions and Prices In This Chapter

Transcription

1 Entering Transactions and Prices In This Chapter Understanding Geneva Transactions and Prices Entering Opening and Closing Transactions Entering Asset Servicing Transactions Understanding Financing and Hedging Transactions Understanding Owner Actions Understanding Exercise and Assign Transactions Understanding Adjustment Transactions Understanding Transaction Distributions Entering Prices and FX Rates

2 5 Entering Transactions and Prices Understanding Geneva Transactions and Prices You use transactions to record investment activity in your portfolios, including: Opening and closing investment tax lots. Income, expenses, and corporate actions related to your portfolios positions. Moving cash and investments into or out of portfolios, or between custodian accounts or strategies. Exercising options that the portfolio holds or has written. Adjustments to a lot s cost, gain/loss, or quantity. You can enter historical market prices and FX rates for the investments and currencies that your portfolios hold. Geneva reports use this information to calculate market values and unrealized gain/loss for your portfolios holdings. You access all transactions from the Transactions menu. For more information about Specific transactions Transactions related to swaps and bank debt Transactions related to investment funds See Geneva Help. Using Geneva. Using Geneva Fund Accounting. q Tip: You can use the Show Deleted check box in the Transaction Lookup screen, and the Deleted check box in the Transaction History screen, to view deleted transactions. You can then click the Re-Add button to make the transaction active again. 60 Understanding Geneva Transactions and Prices

3 Entering Transactions and Prices 5 A Closer Look at Transactions Certain characteristics, such as a portfolio, investment, custodian account, and event date, are common to all transactions. You enter this information on the transaction s General tab. For most transactions, you use the following fields to describe the tax lot that the transaction creates or affects. A B C E D A Enter the portfolio that holds the tax lot. For certain transactions, such as dependent events, you can also use a group portfolio to enter an identical transaction in all of the portfolios in the group. B Enter the investment to which the transaction applies. C Enter the custodian account where the tax lot is custodied. D See Understanding Transaction Dates on page 61. E For a strategy portfolio, enter the strategy with which the tax lot is associated. The list displays the strategies that are valid for the portfolio on the trade date.! Important: If you change the portfolio in a transaction, Geneva creates a new transaction identical to the original transaction, but with the new portfolio, and then deletes the original transaction. The new transaction has its own unique ID number, not the ID of the original transaction. If Geneva cannot commit one of the transactions, it does not commit either one. Understanding Transaction Dates All Geneva transactions have one or more dates associated with them. All transactions have an event date, the date on which the transaction takes place. For trading transactions, the event date is generally the transaction s trade date. Event dates for non-trading transactions include ex-date, record date, expire date, call date, and mature date. If the transaction does not settle (or pay) on its event date, it will also have a settlement or payment date, the day on which it is supposed to settle. This date defaults to the event date plus the investment s Settlement Days setting. Transactions that may not settle on the date that they are supposed to may have separate contractual and actual settlement dates. Transactions are payable or receivable between their event and contractual settlement dates, and overdue payable or receivable between their contractual and actual settlement dates. For all date fields, Geneva warns you if you enter a date that is not a business day in the business calendar associated with the investment s exchange. Understanding Geneva Transactions and Prices 61

4 5 Entering Transactions and Prices How does Geneva handle transactions with the same date? If two transactions have the same event date and time, Geneva treats the transaction with the lower transaction priority number as occurring first. For the list of transaction priority numbers, see Geneva s Transaction Processing Priorities in Using Geneva, Reference Information. If the two transactions have the same priority, Geneva treats the one with the lower cost or price per share as occurring first. K E Y C O N C E P T For the following transactions, you can use the Override Default Priority field on the Miscellaneous tab to override the transaction s priority number with a new number. This way, Geneva treats it as occurring before or after other transactions that have the same event date, if you believe that Geneva s default processing order is incorrect. Capital Gains Distribution Receive Long/Short Credit Activity Deliver Long/Short Dividend Receipt Dependent Event Reorganization Return of Capital Split/Stock Dividend Partial Reorganization Transfer Note: You can also use the User Def Date 2 field on the Miscellaneous tab to change the order in which Geneva processes transactions with the same priority number on the same date. For details, look up transactions, processing order in the Geneva Help index. Understanding Transaction Currencies and FX Rates Most transactions trade and settle (that is, are priced and have their commissions and other expenses paid) in the investment s local basis currency. For Buy, Sell, Sell Short, and Cover Short transactions and distributions, however, you can select different trade and settlement currencies. Income transactions pay in the investment s income currency, or a currency that you specify in the transaction. Geneva assumes that a transaction s book denomination is the portfolio s book currency. For some transactions, however, you can use the Book Denom field on the Miscellaneous tab to book the transaction in a different currency. If a transaction s trade, settlement, or book currencies differ, you can enter the FX rates between these currencies as follows. In this field Enter the FX rate between these currencies On this date Cross Settlement FX Rate Trade/Settlement currency Event (trade) Trade Date FX Rate Settlement/Transaction s book currency Event (trade) Settlement Date FX Rate Settlement/Transaction s book currency Settlement 62 Understanding Geneva Transactions and Prices

5 Entering Transactions and Prices 5! You enter these FX rates as the amount of numerator currency per one unit of denominator currency. For most FX rate fields, however, you can also enter the reciprocal rate and then click the 1/x button to convert it. If you leave the default value of 0 in an FX rate field, Geneva looks up the FX rate in the portfolio s price schedule each time that it calculates the transaction s book currency value. If you do enter a value, Geneva always uses that FX rate to calculate the transaction s book currency value. Important: If you change an existing transaction s trade currency so that it matches the transaction s settlement currency, define the FX field as 1 or 0 first; otherwise Geneva retains the original FX rate in memory and displays an error when you try to commit the modified transaction. Entering Miscellaneous Transaction Revenues and Expenses You use the Expenses and Revenues tabs to enter miscellaneous expenses and revenues associated with a transaction. Note: Use the Expenses and Revenue transactions to enter miscellaneous expenses and revenues that are not associated with a transaction. A Closer Look at Transaction Revenues and Expenses For each expense or revenue item, enter a row in the table. A B C A Assign the item to an expense or revenue financial account. You can select one of Geneva's seeded financial accounts, or one that you create. B Enter the expense/revenue amount in the transaction's settlement currency. C Review the sum of the amounts that you have entered. This sum also appears in the Total Expenses/Revenues field on the General tab, and is included in the Net Amount. For Buy, Sell, Sell Short, and Cover Short transactions and distributions, and for Swap Open transactions, you can also enter non-capitalized expenses, that is, expenses that are associated with a trade, but do not affect the lot s cost basis, and that can be paid from a different custodian account and in a different currency than the trade. For details, look up non-capitalized expenses in the Geneva Help index. In the Help index, enter: warnings Using Transaction Warnings Geneva can automatically warn you if: The event date of the transaction that you are trying to commit is outside the dates when your firm trades the investment. Understanding Geneva Transactions and Prices 63

6 5 Entering Transactions and Prices You enter a transaction that duplicates a transaction that is already in the AGA. The price or FX rate that you are entering in a transaction differs significantly from the last good price or FX rate in the AGA by more than the tolerance percentage that you defined for its investment type. Note that when you enter a transaction, before you enter the transaction s price and FX rate, you must first define its Portfolio field, and its Investment field (to validate the price) and Settlement Currency or Payment Currency field (to validate the FX rate). Entering Opening and Closing Transactions You use Geneva s opening and closing transactions to open and close long and short investment tax lots in your portfolios. Look up the transaction in the Geneva Help index. Use this transaction To Buy Sell Sell Short Cover Short Pairoff Multiway Pairoff Open a long tax lot. Close all or part of one or more long tax lots. Open a short tax lot. Close all or part of one or more short tax lots. A single long futures lot against a single short futures lot. One or more long tax lots against one or more short tax lots. For information about closing asset backeds (original face and current face); crossing zero on equities, debt, futures, and options; and closing against unsettled lots, see the appropriate investment chapter in Using Geneva. In the Help index, enter: lot closing tab q Tip: You can use the JE Lines Viewer to see the JE lines that a transaction generates. For details, look up JE Lines Viewer in the Geneva Help index. Selecting Tax Lots to Close By default, Geneva closes investment lots in a portfolio according to the closing methods that you selected on the portfolio s Preferences tab. You can use a closing transaction s lot closing tab, however, either to select different primary or secondary closing methods for Geneva to use in that transaction, or to select specific tax lots for the transaction to close. For details, see Closing Investment Lots in Using Geneva, Chapter 1, Opening and Closing Investment Lots. 64 Entering Opening and Closing Transactions

7 Entering Transactions and Prices 5 Entering Asset Servicing Transactions Look up the transaction in the Geneva Help index. Use Geneva s asset servicing transactions to enter income and expenses related to investments that your portfolios hold, or to enter other corporate actions that affect these investments. These transactions are also called dependent events, because whether they apply to a portfolio depends on whether the portfolio holds the affected investment. You can enter these transactions in individual portfolios, or in the Geneva Dependent Transaction Pool (GDTP) portfolio to apply them automatically to every portfolio that holds the affected investment. Use this transaction Interest Receipt Dividend Receipt Mark to Market Split/Stock Dividend Dependent Event Reorganization Capital Gains Distribution Paydown Return of Capital Expire Call Mature Defaulted Bond Credit Activity Global Exercise Cash Sweep Cash Accrual To record A coupon payment or expense for a fixed-income investment. A per share dividend income or charge. The mark to market of a future or option. A stock split or dividend paid in stock. A corporate change, such as a merger, spin-off, or conversion. A taxable distribution. A payup or paydown of an asset-backed investment. A non-taxable distribution. The expiration of an option or right/warrant. A bond issuer calling a bond. A bond maturing. A bond, asset-backed, or credit facility going into or out of default. Credit contract (bank debt) activity such as a drawdown or rollover. A portfolio exercising all of its lots of a long call option or right/warrant. The movement of cash into or out of a STIF. The estimated daily accrued interest on a STIF.! Important: Normally, Geneva generates GDTP Interest Receipt, Expire, and Mature transactions automatically for all of your fixed-income investments and options; you do not need to enter them. For details regarding how Geneva generates these transactions, see Using Geneva, Chapter 5, Working with Fixed Income Investments. If you define a dependent event s Cust Acct or Strategy field, Geneva applies the dependent event to only the tax lots in the specific custodian account or strategy, rather than to all of a portfolio s holdings in the investment. Entering Asset Servicing Transactions 65

8 5 Entering Transactions and Prices There are two ways that you can prevent Geneva from applying a GDTP transaction to a portfolio. Use the Exempt transaction Overrides tab To Prevent Geneva from applying an existing GDTP transaction to a specific portfolio. Also, see Understanding Transaction Distributions on page 70 for information on distributing an Exempt transaction to multiple portfolios. Make a different dependent event transaction override an existing GDTP transaction of the same type in a specific portfolio. For details, look up Overrides tab in the Geneva Help index. q Tip: You can use the Dependent Events Viewer to see the GDTP dependent events associated with an investment, with an event date earlier than the current date. For details, look up Dependent Events Viewer in the Geneva Help index. Gross Amount Asset Servicing Transactions Dependent events generally record income or expenses on a per share basis. Geneva calculates the actual income amount in each affected portfolio according to the portfolio s position in the investment. Geneva also features the following gross amount transactions which allow you to enter specific income or expense amounts in individual portfolios. Use this transaction Gross Amount Interest Gross Amount Dividend Revenue, Expenses Partial Reorganization To record Gross amount interest income or expense in a specific portfolio. Gross amount dividend income or charge in a specific portfolio. Miscellaneous revenues and expenses not associated with opening or closing a tax lot. Corporate changes, such as mergers, spin-offs, or conversions and redenominations for a specific number of shares of an investment in a specific custodian account. Using Withholding Taxes and Reclaims If you set up withholding tax matrixes, Geneva can automatically calculate and apply withholding taxes to your Interest Receipt, Dividend Receipt, Gross Amount Interest, and Gross Amount Dividend transactions. To do this, select the Lookup Withholding Percent and Lookup Reclaim Percent check boxes in the transaction. Geneva will look up the appropriate withholding tax rate and apply it to the transaction. If the portfolio can reclaim a portion of the withholding taxes, you can either enter a reclaim date in the transaction to have Geneva book the reclaim automatically, or enter a Reclaim Receipt transaction in the portfolio. 66 Entering Asset Servicing Transactions

9 Entering Transactions and Prices 5 For details on setting up withholding tax matrixes, see Defining Countries and Tax Matrixes on page 35. Understanding Financing and Hedging Transactions Look up the transaction in the Geneva Help index. Geneva features financing transactions that you can use to record a portfolio s repurchase agreements (repos), and hedging transactions that record spot and forward foreign currency exchange (FX) contracts. Use this transaction To record the portfolio Lend Cash (Repo) Borrow Cash (Reverse Repo) Spot FX Forward FX Lending cash and receiving an investment as collateral. Borrowing cash using an investment as collateral. Exchanging of one currency (medium of exchange) for another on the trade date. Exchanging one currency (forward cash) for another at a fixed FX rate on a set date in the future. Before you enter a financing transaction, you must first define a bond or asset-backed investment to act as its loan investment. Geneva uses this investment s interest accrual settings (but not its interest rate) to calculate the repo s accrual. For Forward FX transactions, in addition to a trade date and a settlement date, you must specify a spot date. This is the date when Geneva uses the spot FX rate, rather than the forward FX rate, to determine the contract s unrealized gain/loss. For Geneva to calculate unrealized gain/loss on an open forward FX contract (between its trade and settlement dates), you must create forward price lists and enter forward FX rates. Geneva prices the bought and sold forward cash amounts, and the difference is the gain/loss on the transaction. For details, see Working with Forward FX Rates in Using Geneva, Chapter 7, Working with FX Contracts. Understanding Owner Actions Look up the transaction in the Geneva Help index. Use Geneva s owner actions to move cash and investments into or out of portfolios, or between custodian accounts or strategies. Transactions that settle pending commissions or income payments also appear in this category. Use this transaction To Deposit Withdraw Deposit cash into a custodian account and strategy. Withdraw cash from a custodian account and strategy. Understanding Financing and Hedging Transactions 67

10 5 Entering Transactions and Prices Use this transaction Transfer Deliver Long, Deliver Short Receive Long, Receive Short Commission Settlement Bulk Settlement, Investment Income Settlement To Transfer an investment from one of a portfolio s custodian accounts or strategies to another. Deliver a long or short investment out of a portfolio. Receive a long or short investment into a portfolio. If you have entered transactions with an amount in the Total Commission field, and a broker that you defined with Accrue Commission selected, use this transaction to settle the deferred commissions. For portfolios that manually settle income only, settle income transactions that are pending as of a specific date (Bulk Settlement), or that are associated with a specific investment (Investment Income Settlement). For details, see Settling Income and Expenses Manually in Using Geneva, Chapter 10, Using Optional Portfolio Features. Understanding Exercise and Assign Transactions Look up the transaction in the Geneva Help index. Use exercise and assign transaction to record the portfolio exercising an option or right/warrant that it holds (exercise); or a counterparty exercising (assigning) an option or right/warrant that the portfolio has written (sold short). The specific transaction that you use depends on whether the portfolio or counterparty holds a call or put option, and whether the portfolio holds the option s underlying investment. If the portfolio holds a Enter an To exercise the option to Call option Exercise Buy Buy the underlying. Call option, and holds the underlying short Exercise Cover Buy the underlying to cover the short. Put option, but not the underlying Exercise Short Sell the underlying short. Put option, and holds the underlying long Exercise Sell Sell the underlying. If the portfolio has written (sold short) a Enter an To record the counterparty exercising the option to Put option Assign Buy Sell the underlying to the portfolio. Put option, and holds the underlying short Call option, but does not hold the underlying Assign Cover Assign Short Sell the underlying to the portfolio. The portfolio covers its short with the underlying it purchases. Buy the underlying from the portfolio. The portfolio must sell the underlying short. 68 Understanding Exercise and Assign Transactions

11 Entering Transactions and Prices 5 If the portfolio has written (sold short) a Enter an To record the counterparty exercising the option to Call option, and holds the underlying long Assign Sell Buy the underlying from the portfolio. q Tip: You can enter a Global Exercise transaction to have a portfolio exercise all of the lots of a particular call option or right/warrant that it holds. You can also distribute a Global Exercise among multiple portfolios. If the portfolio s accounting parameters allow crossing zero on an option s underlying investment, you can use an Exercise or Assign Buy transaction to cover all of an on-hand or pending short position and open a long position of the same investment, or an Exercise or Assign Sell transaction to close all of a long position and open a short position of the same investment. For details, see Entering Transactions for Options and Futures in Using Geneva, Chapter 6, Working with Options and Futures. For right/warrants, because the portfolio or the counterparty can open only a long or close a short position in the underlying investment, only the Exercise Buy, Exercise Cover, Assign Sell, and Assign Short transactions are available. Understanding Adjustment Transactions Use Geneva s adjustment transactions to adjust the cost basis, gain/loss, or quantity of investment tax lots in your portfolios. Look up the transaction in the Geneva Help index. Use this transaction To Adjust Cost-Capitalize Adjust Cost-Realize P and S Adjustment Accounting Related Adjust Quantity Receive Distributed Investment Adjust the cost basis of one or more lots of an investment, and apply the adjustment to the cost basis of another investment. Adjust the cost basis of one or more lots of an investment, and offset the adjustment to a revenue or expense account. Adjust the gain/loss on all of the lots of an investment in a strategy or custodian account, without changing the original transaction. Adjust specific financial accounts. These can be either permanent (open-ended) adjustments, or adjustments that Geneva automatically reverses on a specified date. Accounting Related transactions can record separate trade and settlement date financial accounts, and a trade date inventory state. Adjust the quantity held of a specific tax lot. Record an investor s portfolio receiving a distributed investment from a private placement. Understanding Adjustment Transactions 69

12 5 Entering Transactions and Prices Understanding Transaction Distributions Look up the transaction in the Geneva Help index. Use Geneva s transaction distribution utilities to enter a transaction in multiple portfolios or groups of portfolios. These utilities allow you to allocate transactions into your portfolios. You can distribute: Opening and closing transactions: Buy, Sell, Sell Short, Cover Short. Financing and hedging transactions: Lend Cash (Repo), Borrow Cash (Reverse Repo), Spot FX, Forward FX. Asset servicing transactions: Dividend, Exempt, Global Exercise. After you enter a distribution, Geneva records a separate transaction for each of the portfolios in the distribution. For example, if you enter a Buy distribution for five portfolios, Geneva generates five separate Buy transactions, one for each portfolio. You can view one of these Buy transactions by entering its ID in the Transaction Lookup screen, or by double-clicking it in the Distributed Trans tab of the original distribution. To record a transaction distribution, you first create a model transaction, which records general and default information for all of the portfolio transactions, as well as total amounts for the entire distribution. You then allocate portions of the model transaction to your portfolios, custodian accounts, and strategies. A single distribution can have multiple allocations to a given portfolio for different custodian accounts and strategies. If you enter miscellaneous revenues or expenses associated with the distribution, Geneva applies the full amount of each expense or revenue item to each of the distributed transactions. You cannot select specific tax lots to close when you enter a transaction distribution. After you enter the distribution, however, you can open the individual portfolio transactions that the distribution creates, and enter different closing methods or specific lots to close in those transactions. You can distribute a Dividend Receipt or Global Exercise transaction to multiple portfolios, or exempt (with an Exempt transaction) multiple portfolios from an existing GDTP transaction. q Tip: In specific portfolios, you can use the Dividend Distribution s Override Transaction tab to override a GDTP Dividend Receipt transaction that does not reinvest the dividend with one that does, or to override a GDTP Dividend Receipt transaction that does reinvest the dividend with one that does not. Entering Prices and FX Rates You use the Investment Prices screen to enter historical investment prices or FX rates into your price lists. To access this screen click the Price Investments toolbar button. In the Help index, enter: prices, entering 70 Understanding Transaction Distributions

13 Entering Transactions and Prices 5 A Closer Look at Entering Prices and FX Rates A D B C A Select the price list where you want to enter the price. B Each row in the table represents a price or FX rate. Specify whether the price is a new price, or updates or deletes an existing price; the investment to which the price applies; the currency in which the price is denominated; and the date when the price becomes valid. C Use these fields to enter multiple prices with the same investment, currency, or date. D You can use this tab to search a price list for an investment s prices over a range of dates, or to see all of the prices or FX rates for a single day. For details, look up prices, QBE for in the Geneva Help index. Example: To enter a new 01/11/2000 price for ADVS, correct your 01/10/2000 price, and delete your 01/09/2000 price, enter the following rows in the table. Commit Type Investment Denomination Date Price Insert ADVS USD 01/11/ Update ADVS USD 01/10/ Delete ADVS USD 01/09/ You enter FX rates as the number of units of the denomination currency per unit of the investment currency. Example: You can enter an exchange rate as 120 Japanese yen (denomination) per U.S. dollar (investment), or U.S. dollars (denomination) per Japanese yen (investment). q Tip: Geneva can warn you if the price or FX rate that you are entering in a price list differs significantly from the last good price or FX rate in the AGA by more than the tolerance percentage that you defined for its investment type. For details, look up warnings in the Geneva Help index. Entering Prices and FX Rates 71

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