Old Format of IP_MUTUAL_FUND_MASTER Feed File is Uploaded in the System, NULL is passed for “Dynamic Fund Flag” and “Tax Parameter” Fields in MST_INSTRUMENT Table
(Doc ID 2579221.1)
Last updated on AUGUST 26, 2019
Applies to:Oracle FLEXCUBE Private Banking - Version 12.0.1 to 12.0.1 [Release 12]
Information in this document applies to any platform.
Customer has uploaded old format of IP_MUTUAL_FUND_MASTER feed file from screen [Operations > File Upload] in FCPB Application. File got processed successfully in the system.
Old format of IP_MUTUAL_FUND_MASTER feed file does not have TAX_PARAMETER and DYNAMIC_FUND_FLAG fields, hence system processes the feed with NULL values for these fields, which in turn calculates incorrect Capital G/L.
Ideally, system should not process such scheme records with missing TAX_PARAMETER and DYNAMIC_FUND_FLAG fields; Or should process these fields with default values of ‘Y’ or ‘N’, so that the Capital Gain/Loss is accordingly calculated.
The issue can be reproduced at will with the following steps:
1. Upload old format IP_MUTUAL_FUND_MASTER feed file
The issue has the following business impact:
There are some scheme which are dynamic in nature. Initially when the scheme is created, asset class of such scheme can be ‘DEBT’ type. As time passes, such dynamic nature scheme can change to 'EQ' type, hence the concept of DYNAMIC_FUND_FLAG and TAX_PARAMTER fields is introduced in industry in a year 2017 for such dynamic scheme.
If the scheme is dynamic, then capital gain/loss calculation will be based on TAX_PARAMETER. For non-dynamic fund, it will be based on ASSET class of the scheme. Since the old format file is processed in the system which does not have DYNAMIC_FUND_FLAG and TAX_PARAMTER fields, NULL is saved for these fields in the system for all schemes in the upload file.
The impact of uploading the old feed file is, schemes which are dynamic in nature, got processed as non-dynamic funds in the system. Due to this, incorrect capital gain loss is getting calculated in the system for clients investment.
e.g. for a dynamic scheme ‘A’, assuming EQ and DEBT are TAX_PARAMETER and ASSET CLASS respectively. For EQ, % for capital gain/loss is 10 % and for DEBT it is 15 %. If scheme 'A' is processed in the system as non-dynamic then capital gain/loss calculation will be based on 15 % instead of 10 % which has a financial loss for the customer as customer is paying more tax then actual.
There are no changes in the environment, product, account and hardware which has triggered the issue.
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