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When you process NII distributions for a fund, you can set up the system to:

  • Allocate any distribution amount that falls below a minimum yield threshold into an expense reimbursement account to get that share class's distribution amount up to the target distribution yield.
  • Use split dividend processing to split mil rates when ex-dates occur on non business days.
  • Allow share classes to either distribute net investment income or accumulate net investment income. When a share class accumulates net investment income, the share class can calculate mil rate and yield figures on a daily basis, but the system does not book the distribution amount to the ledger and sub ledger.
  • Use yield to minimum processing for waterfall waiver funds that use NII as their daily distribution method to recognize the waterfall waivers. This allows those funds to process their distribution adjustments in a similar manner to how they process their expense waivers.
  • Reverse late activity and reprocess NII to include late distribution activity.

About Setup and Processing Tasks

If you plan to use NII distributions as your fund's daily distribution method, at a very high level you can:

  1. Create NII Rules. Create an NII rule that defines the general ledger accounts included in the calculation of net investment income. For more information, see Manage NII Distribution Rules.
  2. Create Expense Reimbursement Tier Rules. If the fund waives expenses to separate waiver accounts when expenses exceed income in a fund that elects to fully distribution NII, create a rule. For more information, see Manage NII Expense Reimbursement Rules.
  3. Create Waiver Hierarchy Rules. If the funds uses NII distributions along with waterfall waivers for expenses that require yield to minimum processing, set up these rules. For more information, see Manage Yield to Minimum for Waterfall Waiver Funds.
  4. Set Up Master Funds. Set up a master fund with a Daily Distribution Method of Net Investment Income, distribution related rules, and other fund-level options related to distributions. For more information, see Set Up Master Funds for NII Distributions.
  5. Set Up Share Classes. At the share class level, you can specify if a share class accumulates NII rather than posting it on a daily basis. If a share class uses yield to minimum processing, you can specify a minimum yield. For more information, see Set Up Share Classes for NII Distributions.
  6. Set Up Distribution Schedules. If the fund uses split dividend processing to split mil rates when ex-dates occur on non business days, you can use distribution schedules to store split dividend ex-dates
  7. Run NII. Calculate net investment income. As part of this process, the system calculates negative distribution reimbursements, calculates mil rate and yields, performs split dividend processing to calculate split dividend mil rates and daily yields, and posts distribution amounts to the ledger and subledger. If you calculate net investment income for a share class that accumulates net income on a daily basis, the system calculates the mil rate and yield but does not post the distribution to the ledger and subledger. 
  8. Calculate Accumulated NII. If you calculate net investment income for a share class that accumulates net income on a daily basis, you can run this process for the share class as needed to post the distribution to the ledger and subledger. For more information, see Calculate Accumulated NII.
  9. View NII Activity. You can view NII details to display the ledger data used to calculate NII distribution amounts. For more information, see View NII Activity. 

Additional options are available for managing late activity, distribution adjustments, mil rates, and distribution yields. 

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