Fund instructions

Fund instructions are issued from market orders in BFS, market orders are called Fund Batch Orders. A fund instruction communicates to the receiver what should be executed in terms of subscription and redemption orders. A fund instruction can be communicated through various trading routes like Fax (directly to the fund), NFM (Nordic Fund Market) or MFEX (Mutual Funds Exchange).

An example of the connection between various objects is shown below.

For this article we will look at the entry of an order directly from a customers BFS-account for Fund A.

First we will create a new order to buy 500 EUR worth of Fund A using the Fax Execution Interface.

Open

Next, navigate to Order Management and Mutual Funds.

Open

In the first tab, Orders, we have filtered the orders using:

1. Status, only shows placed status for orders

2. Order route, only showing the orders placed using the Execution Interface Fax

3. Product, only showing the instrument called Fund A
    

To illustrate the next step we will create fund batch orders from the fund order:

The following ticket will show:

By clicking Confirm the order will be included in a fund batch order and the state of the fund order is changed to Processed

We can now view the Fund Batch Order below:

If we want to trigger the creation of fund instructions manually we can do one of two things:

1. Navigate to the Instructions tab:
   
    

   
   
   Click on the action menu in the top right corner and select Create Instructions.
   
   
   

   
   
   
   
   
   

2. Navigate to Instructions in the main menu:
   
   
   

    
   
    Click on the action menu in the top right corner and select Create Instructions.
   
   
   

 The Create Instructions dialogue will ask you to select the Execution Interface to generate instructions for. In this example we will select Fax.

The instruction will now have been created and the status set to Stop since we had not selected in the settings for Execution Interface Fax that instructions should get into the state Ready at creation.

The fund order and the fund batch order will now have changed state to Sent.

We will now change the state of the fund instruction to Ready so that it can be included when sending the instruction via fax.

The Ready-dialogue will allow us to enter a message (optional) and then we can click Confirm.

Now we are finally ready to send the instruction and this can be done in two ways.

1. Navigate to System Data->ExecutionInterface→Fax and then click the button Send Instructions; or

2. Navigate to the top right corner of the instructions table and select Manage Instructions and then select the Execution Interface Fax.

In this instance the instruction was sent successfully.

By clicking on the info-icon for the instruction it is possible to view the status history.

For some order routes BFS will receive an acknowledgement that the receiving party has validated the instruction and the instruction will enter the state Acknowledged ("Ack") in BFS.

Since our example used a pre-paid fund the next step is to enter settlement information on the Instructions.

In this instance it is settlement date and value date for the cash leg of the trade that should be entered.

This will result in the fund batch order and the fund order changing their states to Settled and transactions will be made in the customer account, the counterparty account and the custody account.

The next step is to Execute on the fund instruction.

This action will generate the trade transaction for both cash and the instrument as well as settlement transactions for the instrument.

The state of the fund instruction is now Finished and the fund orders and fund batch orders are Done.