Restitutions on cross-currency corporate actions and reallocations 

In most countries, taxes must be paid on income received from assets such as dividends and coupons. However, in some cases, investors are entitled to reimbursement or restitution of tax amount paid or receive restitution on the tax paid.

When accounting for restitutions and operating across various markets, investors can create reallocation transactions and cross-currency corporate actions. These transactions enable the transfer of restitution amounts from one position or lot to another and the conversion of these amounts into different currencies.  

For those working with cross-currency corporate actions or reallocations, it is now possible to transfer expected restitution or expected restitution per dividend amounts from one position to another while simultaneously converting these restitution amounts from the currency of the initial position to that of the new position.  

This functionality supports the following cross-currency events:  

• Partial portfolio and custody reallocations 
• Portfolio reallocations 
• Merger corporate action event types 

 

Also, the solution ensures that restitution values are the same on the profit/loss and nominal levels.  

 

Benefits 

• Enables users to move restitution balances to new positions during cross-currency corporate action events and reallocations, converting transferred values into the currency of the new lot/position;
• Enhances accounting data by applying advanced logic for converting expected restitution values from the currency of out lot or position to the currency of in lot or position; 

This image shows restitution amounts under the Reallocation values sub-window of the General Exchange transaction. Values are shown on Nominal framework. 

This image shows restitution amounts under the Reallocation values sub-window of the General Exchange transaction. Values are shown in the Profit and loss framework. 

Subscription based licensing

Investment Accounting Manager 

Sales module dependency

Restitution/Coupon tax

 

Accrued interest per lot

The ultimate goal for many accounting clients in lot-level jurisdictions (e.g., those using FIFO method or manually matching lots), accurately calculating income per lot is crucial for regulation and tax purposes. Since accrued interest and coupons are components of income, they must be reported for each individual opening lot. 

Benefits 

• Natively supports accrued interest and coupon attribution at the lot level
• Facilitates more robust Data Warehouse reporting and regulatory reporting solutions based on native functionality per lot
• Simplifies backtracking and ad hoc analysis of accrued interest GL figures and reporting numbers in SimCorp Dimension
• Decreases maintenance time and risks associated with performing these calculations outside of SimCorp Dimension

 

The new functionality enables native calculation of accrued interest and coupons on all relevant transactions, like buys, sells, adjustments, coupons, corporate actions, reallocations, and internal trades. 

 

This image shows Profit/Loss view of accrued interest and coupon amounts per lot calculated on transactions. 

 

Lot level figures are available in portfolio calculation, which means easy access for this data for regulatory reporting and DWH reports.

This image shows Portfolio Calculation view of accrued interest amounts per lot. 

 

Complex cases, like ex-coupon instruments, unsettled period accrued interest, and capitalization bonds, are also addressed with these enhancements as well. 

For existing clients already in production with active interest-bearing positions, there is an easy way to migrate to the new solution without the need for reallocations, rebooking, or reconfigurations (freezing holdings). The new process allows clients to pick a date for populating lot-level figures on transactions. A new transaction is needed to establish lot-level figures on holdings, but this process doesn’t disrupt ongoing operations or backdated changes. With this new process, the adoption of this enhancement is much easier and more straightforward and does not require a developer to perform this task. 

This image shows accrued interest inception transaction that establishes accrued interest amounts per lot and going forward on transactions generated after this one, lot accrued interest amounts will be populated.

Subscription based licensing

Investment Accounting Manager 

Sales module dependency

Tax lots