Understand NII Distribution Adjustments

When you use net investment income (NII) distributions and create NII distribution adjustments, the system posts the adjustments to the general ledger, distribution log, and daily yield/mil rate tables. You can identify these adjustments as a spike or a bleed adjustment as needed. You can also post a Total Fund adjustment on a multi class fund.

You can add NII distribution adjustments with any effective date associated with the current accounting date. That is, the effective date does not have to be a business date as long as you process income for the effective date on the current accounting date. For example, Fund A posts non-business day income on the previous business day. On Friday, 12/14/18, you can post an NII distribution adjustment with an effective date of 12/14/18, 12/15/18, or 12/16/18, because the Saturday and Sunday are associated with the Friday accounting date. 

You can use the Post Distribution Adjustment panel to post NII distribution adjustments, and can use the Cancel Distribution Adjustment panel to cancel them. 

Understand Spike Adjustments

In the Post Distribution Adjustment panel, you can identify an NII distribution adjustment that represents a spike. Spikes require an effective date equal to the current accounting date. Spike distributions adjustments cannot be bled.

Understand Bleed Adjustments

In the Post Distribution Adjustment panel, you can identify an NII distribution adjustment using the Bleed Flag to represent an adjustment that is bled. You can also define the number of days to bleed, the bleed amount, and the bleed end date. After you submit a bleed adjustment, the system generates the bleed adjustment and bleeds for the current day (inclusive of all non-business days associated with the accounting date). 

In the Run Bleed Add Process panel, you can create bleed rows for adjustments associated with a bleed that have not reached the Bleed End Date for the current accounting date. The system always creates bleed rows for each effective date associated with the current date. 

In the Edit Distribution Adjustment Bleed panel, you can lengthen or shorten a bleed. You cannot shorten a bleed prior to an effective date associated with the current accounting date. You can turn on a bleed for any distribution adjustment posted on the current account date that is not identified as a spike. You can turn off a distribution adjustment bleed posted on the current accounting date. 

In the Cancel Distribution Adjustment panel, you can cancel a bleed adjustment. When you so do, the system cancels all bleeds associated with the adjustment. You cannot cancel bleed rows. That is, you need to cancel the adjustment generating the bleed rows. If you cancel an NII distribution adjustment associated with a bleed, be aware that the system cancels all bleeds associated with the adjustment. 

Understand Systematic Distribution Adjustments

When you process net investment income (NII) distributions, and the system calculates mil rates and yields, the system can additionally create systematic adjustments for the fund, A fund requires system distribution adjustments only when you set the entity-level Late Activity Distribution Adjustment field to Yes. This allows you to reverse late activity and reprocess net investment income to include late distribution activity. 

The system creates an NII systematic adjustment if mil rates for a given portfolio were disseminated, as indicated by the Control Center's Mil Rate Dissemination statistic, and late activity occurs that updates the mil rate. Under these conditions, the system generates an NII systematic adjustment that reverses the late activity and restores the mil rate to the disseminated value. 

The system also automatically generates a reversal of the systematic adjustment for the next accounting date. This allows the system to recognize the late activity on the next accounting date. The system always generates systematic distribution adjustments and reversals at the class level for multi class funds. 

In addition, the Control Center edit test, Edit Systematic Distribution Adjustment Test (ESDAT) can measure the NAV per share impact of systematic distribution adjustments to a user defined tolerance. 

On this page