Understand Research Fees
The following example describes a research fee.
You receive a buy transaction with the following details:
- Issue Name: XYZ Corp
- Shares: 10,000.000
- Price per Share: 23.50
- Commission: 1,000.00
- Research Fee: 125.00
- Asset ID: 554677AY1
- Trade Ticket: 1153
The system determines the cost of the trade by taking the trade proceeds plus the commission fees:
235,000 (10,000 * 23.50) + 1,000 = 236,000
The system does not include research fees in the cost of the transaction. Instead, it creates a receivable:
| DR | CR | Ledger Note | ||
|---|---|---|---|---|
| 1010000100 | COST OF INVESTMENTS | 236,000.00 | ||
| 2002000100 | INVESTMENT PAYABLE | 236,125.00 | ||
| 1006XXXXXX | RECEIVABLE FOR OTHER FEES | 125.00 | 54677AY1_1153 |
Settlement occurs when you reimburse the research fees back to the fund. Settlement can occur independent of trade settlement and is not associated with a specific security. The receivable is offset by cash:
| DR | CR | ||
|---|---|---|---|
| 1006XXXXXX | RECEIVABLE FOR OTHER FEES | 125.00 | |
| 1001000100 | CASH | 125.00 |
Define Research Fees for Trades
You can apply research fees to all open and close equity and fixed income type transactions. If you unbundle research fees from ordinary commission fees, the system does not include the research fees as part of the cost of the trade. Instead it considers them reimbursable fees to the fund. If you specify a value for the Research Fee field, when you process the trade, Eagle Accounting generates a posting for a receivable that the system ultimately settles against cash once the investment manager reimburses the fund. Research costs do not affect the cost of the trade, but the system stores them as part of the trade details of the transaction. The receivable ledger posting does not reflect the security/asset from the transaction. However, in order to identify the trade/transaction associated with receivable posting, the Ledger Note field (tag 1308) displays the primary asset id of the security along with trade ticket number (tag 761 from the trade.When you define a research fee for a trade and process that trade, the system creates a cash row for the research fee, as well as a cash row for the trade.
The following equity and fixed income trade panels allow you to define research fees using the following related fields.
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WRITERS NOTE: insert from other page BT says that the actual research fee amounts are not known at the time of the trade posting. And you thus need to make adjustments .Confirm. |
Settle Research Fees
When you define a research fee for a trade, the system creates a cash row for the research fee, as well as a cash row for the trade. Settlement occurs when the research fees are reimbursed:
- Conversion panel
- Open/Close Debt Bond panels
- Open/Close Discount Bond (LT/ST) panels
- Open/Close Equity/Mutual Fund panels
- Open/Close Inflation Linked Bond panels
- Open/Close MBS/ABS/IO/PO panels
- Open/Close Rights/Warrants panels
When you use these panels, the fields described in the following table are available when you define research fees.
| Option | Tag | Description |
|---|---|---|
| Research Fees | 17464 | Specifies the trade's research fee in local currency. The research fee is not included in the cost of the trade.These fees create a receivable for the fund. The system relieves the receivable when the fund manager reimburses the fund. When you define a research fee, the system creates two Cash rows for trade. One Cash row is for the trade and the other Cash row is for the research fee.The research fee Cash row has an event type of RESEARCH_FEE. After you specify a value, the system updates the Base Net Amount value accordingly. Also, the Ledger Notes field appears in the Other Information area. |
| Ledger Notes | 1308 | Displays the security's primary asset ID (tag 14) and the trade ticket identification number (tag 761). This field appears if you specify a Research Fees field value for the trade. The system stores this information on Cost and Cash rows in order to tie each research fee Cash row back to the originating trade. |
Settle Research Fees
Settlement occurs when the fund manager reimburses the research fees back to the fund. Settlement of the research fee can occur independent of trade settlement and is not associated with a specific security. The receivable is offset by cash.
You can settle the research fee in several ways. For example, you can settle the research fee cash row separately using the manual cash settlement process with the Run Multiple Settlements panel.You can use this option to settle the fees on a different date than the trade date. You can also settle the research fee cash row using the auto settlement process or the contract cash process. These options allow you to settle the fee at the same time as the trade. For example, you can use the Add Cash Contribution panels or the Run Contract Cash panel.
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WRITERS NOTE: there is an example in the BRD.Detailed Requirements section. Include it? |
Adjust Research Fees
When you book a trade, you do not always know the actual research fee amount at the time the trade posts. When you know the actual research fee amount, or if the research fee amount changes, you can adjust the research fee.
You can make adjustments to research fee amounts by either cancelling and rebooking the trade or by using receivable/payable events to adjust the Receivable for Other Fees ledger account.
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WRITERS NOTE: do adjustments mean a change to the trade research fee amount after the trade is booked? Or are we saying that you leave the trade alone and adjust the receivable only? MISCINC trn debiting or crediting a receivable or debiting realized gain loss? Explain the workflow.How/when does the fund manager reimburse the fund in Eagle Accounting? Does the Adjusting occur before the settling? Are we talking about using the Misc Income/Expense panels? Henry to identify exactly how you adjust the fee (panel name) |
Research Fees and STAR to PACE Direct
If you use Eagle Accounting along with Eagle Performance and use STAR to PACE Direct, STAR to PACE Direct uses the STAR_PERF_FLOW code category values during processing. A STAR_PERF_FLOW code applies to the RESEARCH_FEES event. For more information, see About STAR_PERF_FLOW Code Values.
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WRITERS NOTE: AK to review this section |
Report on Research Fees
The results for the following reports reflect research fees:
- Trade Activity report
- Trial Balance report
- Ledger Subledger Reconciliation Reconciliation report