Manage Rollback and Replay

For example, after the initial buy transaction is processed, the one open lot is flagged with an Event Sequence of 1 in the Position Viewer tool.

When the sell transaction is booked with a trade date of 1/16, the system disposes the units from the one open lot and marks the sell with an Event Sequence of 2.

Suppose the backdated sell transaction is booked with a trade date prior to Event 2's trade date of 1/16. The system rolls back the Event 2 sell transaction, processes the backdated trade, and replays the Event 2 sell transaction. The backdated sell transaction with the trade date of 1/14 displays an Event Sequence of 3. The sell transaction with a trade date of 1/16 displays an Event Sequence of 4, changed from its original setting of 2.

The same process is used for corporate actions. For example, suppose a stock dividend corporate action was backdated with an ex date of 1/15. The system rolls back the sell transaction with a trade date of 1/16, processes the stock dividend corporate action, and then replays the sell transaction with the trade date of 1/16.

The stock dividend corporate action is set with an Event Sequence of 5.

The system replays the sell transaction with a trade date of 1/16 and assigns an Event Sequence of 6.

Event sequencing does not necessarily mean there is an Event 1, Event 2, Event 3, Event 4, and so on. However, you need to look at position transactions as a whole to determine how the system processes the events. This is important for calculations of realized gains/losses, market values, and accruals.

Example - Rollback and Replay Income

The system posts daily income at the lot level based on the security master set up of the fixed income security. Earnings are run for an earn through date. For example, on a Friday, 4/8, a specific account may choose to accrue through the weekend so that the earn through date for its positions is set to 4/10. Other accounts may choose to accrue through the weekend on a Monday, or every day, including weekends.

The system allows you to rollback accruals to a specific earn through date and replay the earnings. For example, you may want to make a rate change for a variable rate security. If you do not receive the weekly resetting rate for a monthly paying security before processing the periodic coupon, the system continues to accrue based on the old rate. Once you receive the new rate, you can rollback the earnings for the position to the effective date of the variable rate and replay the earnings forward.

Another feature of the system's replay functionality is the ability to "catch-up" accruals for a backdated trade. For example, suppose a buy transaction for a bond is loaded for the previous month. The system can catch-up the accruals for the bond from the settlement date to the current date. Additionally, the system can process any periodic coupons during the catch-up period.
For example, suppose a monthly paying variable rate bond has a buy booked on a current date of 1/15/2015 with a trade date and settlement date of 12/8/2014. The system accrues to the current date based on the variable rate table for the security.

The Income tab within the Position Viewer tool shows how the system accrues the bond for a number of days.

You see that on 12/15, the system uses a new rate of 5.50%, which was extracted from the security's variable rate table, as shown in the above example.

The bond is a monthly paying, weekly variable rate changing instrument. Based on the income detail below, when the system processes the accrual for the last day in the coupon period, the most recent effective rate is 6%.

Suppose a new rate should have been entered on 12/29, but was not. The system continues to accrue based on the most recent effective variable rate.
If the new rate is entered after the coupon has been processed, you can rollback the earnings to the effective date of the new rate and roll the earnings forward, as follows:

1. Re-accrue the earnings at the correct rate.

2. Process a correct coupon with the most recent variable rate.

The Cash/Receipts tab in the Position Viewer tool displays the monthly coupon. Although the system calculated the coupon correctly, it is incorrect due to the missing rate for 12/29.

Reprocessing the accrual for that day does not change the previously posted accrual or coupon. You must rollback the earnings to 12/29 so that the system can utilize the new rate when it replays to the current date.

Rollback Earnings

To rollback earnings:

1. In Accounting Center, in the left navigation pane, click Processing and Exceptions > Global Processes > Earnings > Run Income Accruals. 
   You see the Run Income Accruals panel.

2. Complete the options on the Run Income Accruals panel. For example:
   –  In the Select Query Option box, select One Entity/One Security.
   – Under Entity Information and Security information, enter the entity and security identifier.
   –  Enter the date on which you want the earnings rolled back for the Earn Through Date. This is the effective date of the new variable rate.
   –  In the Allow Earnings Rollback box, select Yes. 
             

3. Click Submit.
   The system processes the earnings rollback.

View Results of the Rollback

You can view the results of the earnings rollback in the global process panel and the Position Viewer tool.

In the following example, there is an EARN event type and a CANCELCASH event type because the rollback date was before the previous coupon date.

The Cash/Cancel Receipts tab within the Position Viewer tool shows that the previous coupon has been canceled.

The Income/Income Lots tab within the Position Viewer tool shows the daily accruals have been rolled back to 12/29.

The earnings rollback to 12/29 canceled all accruals from the current date to 12/29. Additionally, it re-accrued the earnings for 12/29 using the new variable rate as of 12/29.

To catch-up the accrual to the current date, you must reprocess the accrual from the Global Processes panel.

Catch Up an Accrual to the Current Date

To catch up an accrual:

1. In Accounting Center, in the left navigation pane, click Processing and Exceptions > Global Processes > Earnings > Run Income Accruals. 
   You see the Run Income Accruals panel.

2. Reset the Earn Through Date field to the day in which you want to accrue earnings through. 
   This is the Current Date. The system only allows a maximum period of 31 days in which you can accrue earnings.             
   

3. Set the Allow Earnings Rollback field to No.

4. Click Submit.

View Results of the Accrual Catch Up

After the accrual is completed, the system re-posts the coupon. For example, the Cash/Receipts tab within the Position Viewer tool shows the monthly coupon for 1/1.

Additionally, the Income/Income Lots tab shows the accruals processed through the requested earned through date using the most recent effective variable rate.