Panels can supplement this data. These rules also determine how the system matches actual cash settlement records sent to the Eagle system from a bank, custodian, or third party to open receivables/payables in STAR accounting in order to create cash settlements in STAR accounting. See About Cash Matching based on Actual Cash Settlements.

Setup for cash segregation also entails setting up and managing segregated cash balances in the ESTAR database, setting up STAR to PACE to use segregated cash balances in the Eagle data warehouse, and setting up reports that provide information specific to cash segregation.

Your exact setup tasks can vary. You can set up and view information for:

• Entities, accounting bases, and composites

• Custodian bank codes

• Cash accounts

• Bank account relationships

• Cash account relationships

• Securities

• Transactions and derivative transactions

• Segregated positions

• Cash balances stored in the ESTAR database and STAR to PACE Direct

• Transferring segregated quantity and cash between custodians of cash accounts

• Reports that track cash segregation information

Set Up to Accrue Interest on Cash Balances

If you use cash segregation, Eagle's accounting solution offers two ways for you to manage accruals for cash balances. You can use either method for the same cash account. Before you choose a methodology, consider which approach best meets your needs. Additional setup is required for both methods.

• Interest on Cash Balances. Accrues interest on cash balances. It allows you to link an interest bearing asset (PST of CRINTC) to a cash account to accrue income and drop coupon payments on the cash balance. This method does not physically move the cash balance. The system creates a cash balance accrual position in the Cost object that has quantity but zero cost, and is not priced. The system processes accruals against the cash balance accrual position. For more information, see Accrue Interest on Cash Balances 

• Cash Account Level Cash Sweeps. Setup for cash sweeps occurs at the cash account level. Each individual cash account associated with an entity has the ability to sweep and can have different processing parameters. 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. With this method, you sweep the segregated cash balance from a cash account into a sweep asset for a Money Market or other interest bearing account (PST of DBSTST or EQEQMF). See Manage Cash Sweeps for Cash Segregation for more information.

Be aware that Eagle clients who do not use cash segregation can set up cash sweeps at the entity level to accrue interest on cash balances. Entity-level cash sweeps have no impact on the CUST basis. For general information about cash sweeps, see Manage Cash Sweeps.

How the System Uses the Custody Accounting Basis to Segregate Cash

During the setup process, you identify a single custody accounting basis for each entity that uses cash segregation. You ensure that each transaction processed in STAR accounting identifies the custodian bank responsible for the transaction and the cash account.

After you submit transactions for processing, the system replicates the transactions for each accounting basis, including the custody basis. If the transaction spawns cash, such as a buy or sell, the system creates a cash transaction that includes the cash account information.

During transaction processing, the system segregates the transaction's asset quantity by custodian location code/custody account number only in the custody basis. The system then creates cash balances based on the cash accounts assigned to each cash record. The system posts the net effect of the cash balance investment to both the custody basis and to the core accounting bases.

Later, the system applies the income accrued and cash received from the cash balances to the NAV of the core accounting book of record. The lower level of cash detail stored on the custody basis is equivalent to the higher level of cash balances stored on the core accounting basis.

How the System Assigns Missing Cash Accounts to Transactions

The system uses a transaction's custodian location and cash account to classify a transaction in the custody basis. Some transactions may not include this information. In addition, transactions generated by the Eagle Accounting system for corporate actions do not include this information.

To allow the system to assign the cash account to transactions when it is not available, you create a set of rules that allow the system to assign missing data. The system uses bank account relationships and cash account relationships to assign cash accounts to a transaction. Bank account relationships allow you to associate multiple custody locations with a single entity. Cash account relationships allows you to associate a bank account relationship with a custody cash account.

During transaction processing the system uses a hierarchy to make a best match for the cash account based on the transaction details. The system uses the custodian and custody bank account number provided with the transaction to identify the bank account relationship in effect for the transaction.

The bank account relationship can apply to the transaction's entity or to the transaction's entity group or reporting composite. If the transaction does not identify the custodian, the system can use the bank account relationship in effect for the transaction to identify the custodian. However, if the system identifies multiple bank account relationships, it cannot determine which one to use.

The system then uses the cash account relationships defined for that bank account relationship to determine the cash account. It uses the transaction's bank alias in combination with the cash account type, cash event type, security type, and long/short indicator to determine the appropriate cash account for the transaction.

The bank alias, tag 16, is the instance number of the bank account relationship that links the entity or entity group for the transaction to their assigned custodian bank code and custody bank account number. The system tries to assign a missing cash account using the following matching steps. If it meets the criteria it applies the cash account; otherwise, it continues to the next step.

For example, say the system cannot identify a cash account relationship for the transaction's bank alias that exactly matches the transaction's values for cash account type (Default, Income, Margin, Reclaim, Trade), cash event type (Disbursement, Receipt), security type, and long/short indicator, so the first match step does not succeed.

The system next tries to find a cash account relationship for the transaction's bank alias with an exact match on cash category, cash event type, and security type, and accepts a long/short indicator value of Default or not defined, denoted by X in the database. If that fails, it continues to the next match step.

If the system cannot use the bank account relationships and cash account relationships to identify a missing cash account number, the transaction succeeds in other accounting bases but fails in the custody basis and goes to Automation Center for repair.