Before you can process transactions that use cash segregation, you must set up Eagle's Accounting solution for use with cash segregation. In This Article
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Cash segregation setup requires you to define the entity and custodian information that allows entities to track segregated holdings by custodian, link entities and custodians to cash accounts, and determine how the system settles transactions for those entities. You define a set of rules that the system uses to assign missing cash accounts to transactions.
Panels can supplement this data. These rules also determine how the system matches actual cash settlement records sent to the Eagle system from a bank, custodian, or third party to open receivables/payables in STAR accounting in order to create cash settlements in STAR accounting. See About Cash Matching based on Actual Cash Settlements.
Setup for cash segregation also entails setting up and managing segregated cash balances in the ESTAR database, setting up STAR to PACE to use segregated cash balances in the Eagle data warehouse, and setting up reports that provide information specific to cash segregation.
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- Entities, accounting bases, and composites
- Custodian bank codes
- Cash accounts
- Entity bank relationships
- Cash account relationships
- Securities
- Transactions
- Segregated positions
- Cash balances stored in the ESTAR database and STAR to PACE Direct
- Transferring segregated quantity and cash between custodians of cash accounts
- Reports that track cash segregation information
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Be aware that Eagle clients who do not use cash segregation can set up cash sweeps at the entity level to accrue interest on cash balances. Entity-level cash sweeps have no impact on the CUST basis. See the Fixed Income Processing User Guide for general information about cash sweeps.top of page
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During the setup process, you identify a single custody accounting basis for each entity that uses cash segregation. You ensure that each transaction processed in STAR accounting identifies the custodian bank responsible for the transaction and the cash account.
After you submit transactions for processing, the system replicates the transactions for each accounting basis, including the custody basis. If the transaction spawns cash, such as a buy or sell, the system creates a cash transaction that includes the cash account information.
During transaction processing, the system segregates the transaction's asset quantity by custodian location code/custody account number only in the custody basis. The system then creates cash balances based on the cash accounts assigned to each cash record. The system posts the net effect of the cash balance investment to both the custody basis and to the core accounting bases.
Later, the system applies the income accrued and cash received from the cash balances to the NAV of the core accounting book of record. The lower level of cash detail stored on the custody basis is equivalent to the higher level of cash balances stored on the core accounting basis. top of page
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The system uses a transaction's custodian location and cash account to classify a transaction in the custody basis. Some transactions may not include this information. In addition, transactions generated by the Eagle Accounting system for corporate actions do not include this information.
To allow the system to assign the cash account to transactions when it is not available, you create a set of rules that allow the system to assign missing data. The system uses entity bank relationships and cash account relationships to assign cash accounts to a transaction. Entity bank relationships allow you to associate multiple custody locations with a single entity. Cash account relationships allows you to associate an entity bank relationship with a custody cash account.
During transaction processing the system uses a hierarchy to make a best match for the cash account based on the transaction details. The system uses the custodian and custody bank account number provided with the transaction to identify the entity bank relationship in effect for the transaction.
The entity bank relationship can apply to the transaction's entity or to the transaction's entity group or reporting composite. If the transaction does not identify the custodian, the system can use the entity bank relationship in effect for the transaction to identify the custodian. However, if the system identifies multiple entity bank relationships, it cannot determine which one to use.
The system then uses the cash account relationships defined for that entity bank relationship to determine the cash account. It uses the transaction's bank alias in combination with the cash account type, cash event type, security type, and long/short indicator to determine the appropriate cash account for the transaction.
The bank alias, tag 16, is the instance number of the entity bank relationship that links the entity or entity group for the transaction to their assigned custodian bank code and custody bank account number.
The system tries to assign a missing cash account using the following matching steps. If it meets the criteria it applies the cash account; otherwise, it continues to the next step.
Match Step | Cash Account Type (tag 62) | Cash Event Type (tag 53) | Security Type (tag 82) | L/S Indicator (tag 15) |
1 | match | match | match | match |
2 | match | match | match | all |
3 | match | all | match | match |
4 | match | all | match | all |
5 | all | match | match | match |
6 | match | all | all | match |
7 | all | match | match | all |
8 | match | all | all | all |
9 | all | all | match | match |
10 | all | all | match | all |
11 | all | all | all | match |
12 | all | all | all | all |
For For example, say the system cannot identify a cash account relationship for the transaction's bank alias that exactly matches the transaction's values for cash account type (Default, Income, Margin, Reclaim, Trade), cash event type (Disbursement, Receipt), security type, and long/short indicator, so the first match step does not succeed.
The system next tries to find a cash account relationship for the transaction's bank alias with an exact match on cash category, cash event type, and security type, and accepts a long/short indicator value of Default or not defined, denoted by X in the database. If that fails, it continues to the next match step.
If the system cannot use the entity bank relationships and cash account relationships to identify a missing cash account number, the transaction succeeds in other accounting bases but fails in the custody basis and goes to Automation Center for repair.top of page