Redemption
Redemption is when for example a financial instrument expires like a bond/structured product, and all the holdings of that instrument should be sold in one batch. The redemption is handled in the same way as when making a sale of instruments in BFS.
In BFS redemption can be done from two different menus, from the menu Product Management > Corporate Actions OR from the action menu at the Instrument. Either way, the result will be the same.
or
A pop-up ticket will appear on the screen. First choose an instrument.
Next choose type of corporate action, in this example: Redemption
This will open a creation dialogue where you can define the following properties.
Property | Description |
|---|---|
| Name | Is pre-filled, but can be changed. For example: typeofcorporateaction_ISIN_date / Redemption_SE1234565555_20170117 |
| Trade Date | This is the date that should be used as the TradeDate on the created transactions. |
| Value Date | This is the date that should be used as the ValuteDate on the created transactions. |
| Settlement Date | This is the date that should be used as the SettlementDate on the created transactions. |
| Price | The price of the instrument. |
| Custody Account (Cash) | The total redemption amount will be booked into the selected custody account. |
| Custody Account (Instrument) | From what custody account should we book out the instrument from when making the redemption, |
Click Create to create the redemption.
The redemption has now been Created. Click at the button Prepare to view which transactions that will be made at each account.
The redemption now has the status Prepared which means that the back office administrators gets a preview of all transactions that will be made. As long as the redemption have status Prepare the back office administrators can change the parameters.
House summary shows the house accounts, the Custody Account (Cash) shows the amount of the sale and custody Account (Instrument) show the amount of instruments that will be sold.
Resulting Client Transactions shows all transactions that will be made for each customer, sale transactions.
When the batch is in the "Prepared" state it is still possible to change the parameters of the batch and run the "Prepare" function of the batch again. For example, change the price. Click Save to save the changes and Prepare the batch again to view the changes.
It´s important to make all changes before choosing to Execute, it is not possible to change the redemption when it is executed.
When we are satisfied click on the button Execute or choose Execute in the action menu and click Confirm to Execute the batch.
A pop-up ticket will appear where the back office administrators get a choice if they want to change the status of the instrument. It is currently set to open, which means that trades can still be recorded. Change the status in the drop-down menu and press Save. The status of the instrument can also be changed from Product Management.
The redemption is now executed and transactions are created for the house accounts and the client accounts.
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