Execution fees update

History of changes

Date	Link to Jira ticket	Who	What
6.12.2024	BKR-2	@a user	doc creation

Glossary

Mandate	Execution Fee
Contract for the provision of services, where all conditions and rates are fixed.	The charge that a broker or trading platform imposes on a client for executing a buy or sell order on a financial market. It is a cost associated with the actual act of processing and completing the trade.

Aim

Have a differentiated handling of Brokerage (BR) and Asset Manager (AM) execution fees

BR: Fees amounts to be blocked during specific periods before they are displayed to Clients
AM: Fees to be displayed in order details, with immediate blocking of the relevant order amount.

Access policy and authorities matrix

Authority name= Transactions_view

Authority name= Transactions_modify

Permission	Description
View	User has access to transactions to view them
Modify	View + User can edit transactions

Requirements

Requirement	Use case	Tech Comments
Each Saas needs to have ability for Users to indicate on Mandete execution fees. The constructer of execution fees shall include specific fee rates ( % ) with additional settings: Specify the minimum order amount for the fee to be applied. Define fees based on different instrument types and subtypes Фы Use the rates manually in constructor and can always check the current settings.	Preconditions: The mandate for the client has been created. Execution fees feature is enabled o for Saas subscription. Steps: User selected a mandate and saw Fee tab with fee configuration options. The system provided an option to add or edit execution fees If the user wanted to specify a percentage-based fee rate, then: Allow the input of a percentage value in the “Fee Rate” field. If the user wants to set a minimum order amount, then: Provide a field for inputting the minimum order value (numeric). If the user wants to define fees based on instrument types and subtypes, then: Display a drop-down or multi-select list for different instrument categories ( Fixed Income (bond), Equity, Certificate (equity) .. etc ). Allow linking specific rates to selected instruments. If the user saved the fee configuration, then: Validate all inputs. Display the updated fee structure in the "Fee " tab. If the user wants to apply the rates manually, then: Provide an option to trigger fee application at will, overriding the automated process. If the user checked the current settings, then: Display a summary of: The percentage fee rate. Minimum order amount Instrument-specific.	Related doc https://lunawealth.atlassian.net/wiki/spaces/WM/pages/3534585857 Existing execution fee construction
User shall have ability to see history of setting of execution fees	-	May be constructed as user-friendly logs interface
Users need additional filed Accruals on positions to store there the aggregated on date execution fees that are not withdrawn. execution fees stored in confluence	A new execution fee is recorded for a position Preconditions: The system is set up to calculate execution fees for each position. The Accruals field exists in the positions table and is visible in the user interface. Non-withdrawn execution fees are tracked in the system. Steps: A user executed a trade associated with a position, then: The system calculates the execution fee using the applicable criteria. If the calculated execution fee is not immediately withdrawn, then: The system identifies the position linked to the trade. If the system identifies the relevant position, then: Aggregate all non-withdrawn execution fees for that position as of the current date. If the aggregation is successful, then: Automatically update the Accruals field for the position with the total non-withdrawn execution fees. If a user reviews the position details, then: Display the updated Accruals field in the position summary.	Calc - check if we can calculate accruals as Accrued logic Update metaDTO
If 2 system Brokerage and Asset manager are connected then, the system shall give ability to apply execution fees differently. Brokerage Saas shall have ability to store not withdrawn execution fees in accruals Asset Manager Saas shall receive execution fees from Brokerage as sum of execution fees for a period.	Actors: BR Preconditions: The trade is executed, and execution fees are calculated. Steps: The system calculates execution fees for each trade. If the execution fee is not withdrawn immediately, then: Store the fee amount in the Accruals field for the corresponding mandate or position. If the user reviews the position or mandate details, then: Display the total non-withdrawn execution fees in the Accruals field. Preconditions: Execution fees are recorded and stored in the `Accruals` field in the Brokerage SaaS. A connection exists between the Brokerage and Asset Manager systems. Steps: If the Asset Manager requests execution fees for a specific period, then: Aggregate all execution fees for the requested period in the Brokerage SaaS. Generate a data package containing: Aggregated fee sum. Period details. Optional trade details. If the data package is prepared, then: Transmit the package to the Asset Manager SaaS. If the transmission is successful, then: Update the `Accruals` field to reflect that the fees for the period were sent. Preconditions: The Asset Manager SaaS is connected to the Brokerage SaaS. A data package containing execution fees has been transmitted. Steps: If the Asset Manager SaaS receives an execution fee data package, then: Validate the package to ensure: It corresponds to the requested period. The fee sum is correctly calculated. If the data is validated, then: Record the total execution fees for the period in the Asset Manager’s records. If the user reviews the execution fees for the period, then: Display the aggregated fee value along with the associated period details. If reconciliation is initiated, then: Compare the received execution fees with the Brokerage system’s reported data to resolve discrepancies.

Executed order

#	Trade Date	Value Date	Type	Sub Type	Qty	Price	Commission BANK	Net Amount Pf Ccy	Bank Account	Status	Status reason	Comment
	02/02	04/02	BUY	-	5	110		-550	BR BA	Active	Order	System transaction
Generated fee transactions
child	02/02	04/02	Fee	Execution fee	10.5	1	-	-10.5	BR BA	Active	Pending_approval	Order transaction
parent	02/02	04/02	BUY	-	5	110		-581	BR BA	Active	Order	System transaction
RESULT for exchange with AM	02/02	04/02	BUY	-	5	110		550	BR BA	Active	Order

After Transaction is received from Custodian

#	Trade Date	Value Date	Type	Sub Type	Qty	Price	Commission BANK	Net Amount Pf Ccy	Bank Account	Status	Status reason	Comment
	02/02	04/02	BUY	-	5	110	20.5	-570.5	BR BA	Pending	Not_Matched	Bank transaction
Generated fee transactions
child	02/02	04/02	Fee	Execution fee	10.5	1	-	-10.5	BR BA	Active	Pending_approval	Order transaction
parent	02/02	04/02	BUY	-	5	110	31	-581	BR BA	Pending	Not_Matched	System transaction
RESULT for exchange with AM	02/02	04/02	BUY	-	5	110	31	-581	AM BA	Active	Confirmed

After matching and approval

#	Trade Date	Value Date	Type	Sub Type	Qty	Price	Commission BANK	Net Amount Pf Ccy	Bank Account	Status	Status reason	Comment
	02/02	04/02	BUY	-	5	110	20.5	-570.5	BR BA	Activ	Confirmed	Bank transaction
Generated fee transactions
child	02/02	04/02	Fee	Execution fee	10.5	1	-	-10.5	BR BA	Active	Confirmed	Order transaction
parent	02/02	04/02	BUY	-	5	110	31	-581	BR BA	Active	Confirmed	System transaction
RESULT for exchange with AM	02/02	04/02	BUY	-	5	110	31	-581	AM BA	Pending	Not_Matched