This module will not be further enhanced. Support is limited to defect fixing only.

Introduction to Fees Optimisation

The Fees Optimisation module manages the calculation and posting of fees for securities or derivatives orders, based upon the gross amount total of the corresponding trade executions. Non-execution and minimum-maximum fees can be applied.

Non-Execution and Minimum Fee

The Non-Execution and Minimum Fee functionality allows the user to calculate the execution fee (Min/Max fees), non-execution fees, and to charge the minimum or the maximum fee for the sum of all partial executions and the non-execution order fee or cancellation. The fees will be fairly calculated so that the customer won’t be overcharged and the bank won’t be undercharged.

The execution fee (also known as Min/Max fee) is charged for every order that has execution (partial or full).

If there is no execution for a particular day, then no minimum fee is charged. However, if by the order’s expiry date there were no executions at all, then the non-execution fee will be applied.

The minimum fee amount is lower between the flat fee and 25% of the daily executed order, for any given order. The fee is charged on a daily basis once a day for each partially executed order up until the order is fully executed or the order expires.

The non-execution fee applies to any order that the branch or the trading room or investment centre (channel) was involved in the input or amendment. If the order was captured from the internet or mobile app channel, there is no non-execution fee (unless the branch or trading room modified it).

The rate of the non-execution fee is the same as the minimum fee, i.e. the same FT.COMMISSION.TYPE application is used for both fees so that if the bank decides to increase the amount of the minimum fee, the same increase applies to the non-execution fee.

The following items have been introduced as part of this functionality:

• The ILFEES.PARAMETER application allows the user to indicate the execution fees and non-execution fees. When the service runs after the stock exchange cut-off time, the fee type defined here will be read and the appropriate fee will be calculated and the entries raised after the reading are added to the FT.COMMISSION.TYPE application.
• New fields are added to the FT.COMMISSION.TYPE application to hold the currency in which the minimum and maximum fees are specified and to store the minimum and maximum fee amounts applicable for the commission. These fields are expected to be configured to ensure that a boundary is set for the Min/Max fees (execution fee).

Non-execution fees will be applied only for orders inputted through specific channels like a branch and this will be applied:

• To unexecuted orders (no execution taken place throughout the order life cycle).
• When an order is cancelled by the customer (in case of an order inputted through a branch and no execution has taken place). Entries are raised as appropriate.

This functionality also allows users to reverse securities trades so that the order execution is updated with the correct nominal (quantity). The trade reversal and the execution update, in most cases, will happen before the fees service runs at COB. Hence, this will not have any impact on the fees calculations. In case of an order, which didn’t have any execution and a new trade is being entered, the system will calculate the minimum and maximum fees. In case modifications need to be done on a different date, there could be a trade that is being directly inputted and the corresponding Original Order Id is entered along with the other details (this is the case of rebooking a trade directly).