Page Comparison

Mixed Basis Rule Name

11666

Specifies the mixed cost basis rule name for which the details apply.

Rule Level Option

7100

Identifies the hierarchy level at which the system applies the mixed cost basis rule details. Additional fields are displayed based on your selection.

 Options include:

• Entity and Asset ID.

•  Applies the rule to a specified entity/asset grouping. When you select this value, the Entity Name, Entity ID, Issue Name, Ticker, and Cross Reference ID fields become available. When you add the rule details, the system also processes cost method changes for individual positions, including short positions,

• Entity ID and Cost Basis Rule Type.

•  Applies the rule to a specified entity/cost basis rule type grouping. When you select this value, the Entity Name, Entity ID, and Cost Basis Rule Type fields become available.

• Entity ID and Security Type.

•  Applies the rule to a specified entity/security type grouping. When you select this value, the Entity Name, Entity ID, and Security Type fields become available.

• Entity ID and Processing Security Type.

•  Applies the rule to a specified entity/processing security type (PST) grouping. When you select this value, the Entity Name, Entity ID, and Processing Security Type fields become available.

• Entity ID and Processing Security Type Group.

•  Applies the rule to a specified entity/processing security type group grouping. When you select this value, the Entity Name, Entity ID, and Select Processing Security Type Group fields become available. You can choose a PST group by selecting a value for all equity PSTs, all fixed income PSTs, all option PSTs, or all contract level swap PSTs.

• Asset ID.

•  Applies the rule to a specified asset. When you select this value, the Issue Name, Ticker, and Cross Reference ID fields become available.

• Cost Basis Rule Type.

•  Applies the rule to securities with a specified cost basis rule type. When you select this value, the Cost Basis Rule Type field becomes available.

• Security Type.

•  Applies the rule to securities with a specified security type. When you select this value, the Security Type field becomes available.

• Processing Security Type.

•  Applies the rule to securities with a specified processing security type. When you select this value, the Processing Security Type field becomes available.

• Processing Security Type Group.

•  Applies the rule to securities within a group of processing security types (PST). When you select this value, the Select Processing Security Type Group field becomes available. You can choose a PST group by selecting a value for all equity PSTs, all fixed income PSTs, all option PSTs, or all contract level swap PSTs.

Cost Method

22

Specifies the cost method the system uses to calculate gain/loss amounts from the sale of security lots held by the entity/accounting basis.

Options include:

• Average. The system determines which lot to relieve (sell) based on the value in the Lot Selection Method field. After identifying the lot, the system determines

• the average of all of the holdings (total cost of holdings divided by the number of holdings) to calculate a gain or loss amount for reporting purposes. If you select

• Average, you can amortize fixed income securities using

• only selected options the system has available.

• The system applies the total amortization to individual lots based on the percentage of total par owned in the position.

• Identified. Default. The system determines which lot to relieve (sell) based on the value in the Lot Selection Method field. After identifying the lot, the system determines

• its cost and compares that to the lot's earnings to calculate a gain or loss amount for reporting purposes. If you select

• Identified, you can amortize fixed income securities using

• all the options the system has available.

Lot Selection Method

27

Specifies the lot selection method the system uses to relieve (sell) lots of a security held by the entity. Options include:

• First In First Out (FIFO).

•  Lots acquired first are sold first. The oldest lot is sold first based on the holding date. If you set the accounting basis Cost Basis Covered Indicator field (tag 2818) to Y, unknown cost lots are relieved first. The oldest cost lot is sold first based on the holding date.

• Last In First Out (LIFO).

•  Lots acquired last are sold first. The most recent lot is sold first based on the holding date. If multiple lots share the same holding date, the lot with the greatest event sequence is relieved first. The event sequence, set internally by the system, indicates the processing order of transactions within the same position.

• High Amortized Cost or High Cost (HCLOT).

•  The lots with the highest current cost are sold first. The system uses current unit cost, which includes amortization for debt securities. This method relieves the lots that can generate the maximum loss or the minimal gain.

• Low Amortized Cost or Low Cost (LCLOT).

•  The lots with the lowest current cost are sold first. The system uses current unit cost, which includes amortization for debt securities. This method relieves the lots that can generate the minimal loss or the maximum gain.

• High Original Cost (HORIG).

•  The lots with the highest original cost are sold first. The system uses the original unit base cost of the open lots. It relieves the lots that can generate the maximum loss or the minimal gain.

• Low Original Cost (LORIG).

•  The lots with the lowest original cost are sold first. The system uses the original unit base cost of the open lots. It relieves the lots that can generate the minimal loss or the maximum gain.

• Identified Lot (IDLOT).

•  The specified lot or lots are sold first, which determines cost and tax implications. You can optimize this option to specific tax situations by selecting the specific lots to be sold. If you select this method, the lower pane in the close trade panel displays lot details for each available lot, as determined by the entity's controlling basis. If no controlling basis exists, it displays lots for the primary basis. You must specify the quantity for one or more lots that you want to relieve. The total quantity you specify for the open lots must match the quantity entered for the total close. The close trade relieves the selected lots in each of the entity's accounting bases, and keeps the lot structures in sync. The system uses the lot's Orig Event ID field (tag 457) to match a single open lot in one basis to corresponding multiple open lots in another basis, as needed. This can occur for lots fractured as a result of wash sale processing.

• Best Tax.

•  The lots are selected and sold with the objective of taking losses first (short term then long term) and gains last (long term then short term). Lots are sold in the following order:

  1. Short term Losses. Lots that reflect a short term loss are sold first, beginning with lots that generate the greatest short term loss down to the least short term loss.

  2. Long term Losses. Lots that reflect a long term loss are sold, beginning with lots that generate the greatest long term loss down to the least long term loss.

  3. Short term No Gains or Losses. Short term lots that reflect no gain or loss.

  4. Long term No Gains or Losses. Long term lots that reflect no gain or loss.

  5. Long Term Gains. Lots that reflect a long term gain, beginning with lots that generate the least long term gain up to the greatest long term gain.

  6. Short Term Gains. Lots that reflect a short term gain, beginning with lots that generate the least short term gain up to the greatest short term gain.

• Tax Advantage (TXADV).

•  The lots with the lowest tax liability are sold first to minimize tax liability.

• Versus Purchases (VSP).

•  The lots are selected and sold based on lot purchase characteristics, such as the target purchase date and the target purchase price. This option must be specified at the trade level.

• Pro Rata.

•  The lots are selected and sold based on a proportionate allocation.

• Tax Efficiency.

•  The lots with the lowest tax liability are sold first to minimize tax liability. The system calculates the tax liability based on the manipulation of entity level tax factors for long and short term gains, long and short term losses, and currency gains. The system also incorporates the wash sale disallowance effect and considers the overall tax implications of closing each individual lot.

• Modified FIFO (MFIFO).

•  The open lots with the same original acquisition date (tag 216) as the close transaction are sold first, starting with the lots with the lowest unit cost local. If there are no open lots with the same acquisition date as the close transaction, or all same day lots have been sold, the oldest open lots are sold first based on the acquisition date. Within a single acquisition date, the lots with the lowest unit cost local are sold first.

• Use Basis Lot Selection Method. The system uses the lot selection method associated with the transaction's accounting basis to determine how to relieve (sell) lots of a security held by the entity.

Primary Basis Lot Selection Rule

2299

Relieves the current holdings of a security for a non primary accounting basis. This field determines processing for the open lots that are eligible to be closed on an additional accounting basis. 
Options include:

• Use Basis Value Unless Event = IDLOT or VSP.

•  Default. The system uses the value in the accounting basis table unless the incoming event has a lot selection method of Identified Lot (IDLOT) or Versus Purchase (VSP). That is, if the incoming event has a lot selection method of IDLOT or VSP, the system utilizes the IDLOT or VSP lot selection method to close the lots for that particular accounting basis. If the incoming event does not have an IDLOT or VSP lot selection method, the system utilizes the lot selection method on the accounting basis.

• Use Event Value.

•  The system uses the lot selection method from the incoming event and does not utilize the lot selection method in the accounting basis table.

• Always Use Basis Value.

•  The system uses the accounting basis default regardless of what lot selection method is on the incoming event.

• Use Historical Method Unless Event ID = IDLOT or VSP else use event.

•  The system uses the historical lot selection method on the accounting basis unless the lot selection method on the incoming event is equal to Identified Lot (IDLOT) or Versus Purchase (VSP).