Cash sweep processing physically moves a cash balance to a sweep asset position, where it maintains principal and income amounts. The system can then process accruals against the sweep asset position. If you use cash segregation, you can use cash sweep processing to sweep the segregated cash balance from a cash account into a Money Market or other interest bearing account.

Set Up Cash Sweeps

When you use cash segregation, setup for cash sweeps occurs at the cash account level. Each individual cash account associated with an entity can have different processing parameters. Each individual cash account can have the ability to sweep. For each cash account you sweep, you define the sweep instrument along with the minimum balance to sweep. The cash sweep process then sweeps individual cash balances into custody level holdings where they accrue interest if the STIF instrument is an interest bearing asset. The system maintains principal and income balances throughout the cash sweep process.

You set up the sweep vehicle with a processing security type of either STIF (DBSTST) or Mutual Fund (EQEQMF) for use with cash sweep processing. You can use a sweep asset priced at 1 or can set up the sweep asset as a floating price instrument. You can also set up corporate actions for the sweep asset, such as coupons and maturities.

For detailed information about how to set up cash account-level cash sweeps when you use cash segregation, see Manage Cash Sweeps.

Process and Report on Cash Account-Level Cash Sweeps

You use the global Run Cash Sweep panel to process cash sweeps. During cash sweep processing at the cash account level, the system creates sweep open and close transactions. It creates holdings for the new sweep asset on all accounting bases for the entity based on what was linked to the cash account you are sweeping.

The sweep process also generates transactions at the CUST accounting basis level, as that is where it maintains the custody account breakout. The sweep asset generates cash held at same custody location where the cash is a balance account (as determined by the Cash Balance Indicator option). With cash sweeps, you can:

• Run a global process to perform the cash sweep. 

• View position information for sweep assets.

• Maintain and report on the principal and income breakdown for sweep transactions.

• Report on cash sweep information.

For detailed information about how the system processes and reports on cash account-level cash sweeps when you use cash segregation, see Manage Cash Sweeps.