Process Reinvestment Activity for Fund of Funds Allocations

In the third part of the fund of funds allocation process, after the system stores all essential data on the staging tables, the fund of funds allocation process checks to see if any cash dividend or cash coupon settlements have been processed for the top level fund for any underlying securities. This process is looking for dividend and/or coupon settlements from the underlying security to reinvest directly back to that the underlying fund.

If yes, then the system applies the reinvestment ratio to the total coupon and dividend settlements and excludes this amount from the top level fund cash to be allocated to the underlying funds. It processes a reinvestment row for each underlying entity which has a cash coupon or cash dividend settlement and applies this reinvestment amount to the calculated allocated amount for each pending trade.