Create Waiver Hierarchy Rules for NII Distributions

In the Create/Update Waiver Hierarchy Rule panel, you can use the Add option to create a new waiver hierarchy rule for use with yield to minimum NII distribution processing, and set up the hierarchy levels for that rule. Each hierarchy level has a priority value, along with an expense and waiver account used for waiver calculations. You can also use this panel's Update option to add a new hierarchy level to an existing special waiver hierarchy rule. For details, see Update a Waiver Hierarchy Rule to Add a Hierarchy Level.

For waterfall waivers for NII, you must set up a fund level waiver hierarchy rule as well as a class level wavier hierarchy rule. Distribution adjustments are not eligible for recoupments. For general information about waiver hierarchy rules, see Manage Waiver Hierarchy Rules.

To create a waiver hierarchy rule for NII distributions:

In Accounting Center, in the left navigation pane, click Setup > Expense > Special Waivers > Create/Update Waiver Hierarchy Rule.
You see the Create/Update Waiver Hierarchy Rule panel.
Click the Add or Update Waiver Hierarchy Rule list and select Add.
In the Special Waiver Hierarchy Rule box, specify the name of the waiver hierarchy rule.
In the Special Waiver Type list, select Waterfall Waiver for NII as the type of special waiver that uses the waiver hierarchy rule.
Other options used in expense processing include Assumption Fee and Waterfall Waiver.
Set the Rule Type list to Fund or Class.
After you provide this information for the rule, you can specify the Rule Criteria options for one or more hierarchy levels.
In the Accounting Basis field, select the basis that applies to the hierarchy level.
In the Effective Date field, specify the date that the hierarchy level becomes effective.
In the Waiver Hierarchy box, specify a numeric value for the priority of the hierarchy level.
For example, if you have levels with a waiver hierarchy of 1, 2, and 3, the system uses Waiver Hierarchy Level 1 as the top priority level.
Complete the remaining options in the panel for the hierarchy level.
If you want to define multiple tier levels, use the pane at the bottom of the panel, as follows:
- Click the lower pane.
- Right-click and select Add Rows.
- Enter the number of rows you want to add in the Enter Rows Count dialog box and click OK. You need to add a row for each additional level you want to associate with the tier rule.
- Complete the fields on each row you added.
Click Submit.
Repeat this process as needed so that you set up both a fund-level and a class-level waiver hierarchy rule for use with NII waterfall waivers.

Create/Update Waiver Hierarchy Rule Panel Options

In the Create/Update Waiver Hierarchy Rule panel, you can add or update a waiver hierarchy rule for use with expense special waivers or for use with NII distribution adjustments when you use waterfall waiver funds with a minimum yield. The following are the options in the Create/Update Waiver Hierarchy Rule panel.

Option	Tag	Description
Add/Update Special Waiver Hierarchy Rule
Add or Update Hierarchy Rule?	7100	Indicates whether you are adding a new waiver hierarchy rule or maintaining an existing waiver hierarchy rule. Options include: Add. Allows you to add a waiver hierarchy rule and add rule criteria for that rule. Update. Allows you to add a rule criteria entry for an existing waiver hierarchy rule.
Special Waiver Hierarchy Rule	5038	Specifies the name of the special waiver hierarchy rule you are adding. This field appears when you are adding a new waiver hierarchy rule.
Special Waiver Type	12006	Identifies the type of special waiver that uses the special waiver hierarchy rule. Options include: Assumption Fee. The waiver hierarchy rule applies to a special waivers for an assumption fee. You can only select a single expense to waive because the system hard codes the second waiver for the assumption fee. Waterfall Waiver. The waiver hierarchy rule applies to special waivers for waterfall waivers. For waterfall waivers, you must set up a fund hierarchy rule as well as a class hierarchy rule. Waterfall Waiver for NII. The waiver hierarchy rule applies to waterfall waiver funds when you use net investment income (NII) as your daily distribution method and define a minimum yield for a share class. When you process NII distributions, it allows waterfall waiver funds to calculate yield to minimum distribution adjustments that reflect the waterfall waiver process.
Special Waiver Hierarchy Rule	7038	Specifies the name of the special waiver hierarchy rule you are updating. This field appears when you are updating an existing waiver hierarchy rule.
Rule Type	2785	Indicates whether you are defining the special waiver hierarchy rule for fund or class level expenses. Options include: Fund. The system applies the special waiver hierarchy rule at the fund level. If you select Assumption Fee as the special waiver type, the system displays a Fund rule type and you cannot change it. Class. The system applies the special waiver hierarchy rule at the share class level.
Select Rule Criteria
Accounting Basis	21	Specifies the accounting basis.
Effective Date	1109	Specifies the effective date.
Waiver Hierarchy	5039	Specifies the number that represents the hierarchy level to prioritize the expenses to waive. For example, assign a value of 1, 2, or 3 in a sequence to identify the expense and waiver rank within the fund and class hierarchy rules used for waterfall waivers. Here 1 identifies the first level for the system to waive during processing. The system posts the lowest number, that is, 1, first and then moves down the hierarchy.
Expense Name	3252	Specifies the valid expense account for the expense to waive.
Expense RecPay Account	1825	Displays the expense account number for the selected expense.
Expense RecPay Share Class	12012	Displays the level, fund or share class, at which the system processes the receivable/payable event associated with the expense.
Waiver Name	1632	Specifies the name of the waiver account for the expense.
Waiver RecPay Amount	1826	Displays the expense account number for the selected waiver account.
Waiver RecPay Share Class	7012	Displays the level, fund or share class, at which the system processes the receivable/payable event associated with the waiver.
Special Waiver Recoupment	760	Indicates whether to include the expense in the special waiver recoupment process. This option is not available if you set the Special Waiver Type to Waterfall Waiver for NII. Options include: Yes. Include the expense in the special waiver recoupment process. No. Do not include the expense in the special waiver recoupment process.