Cash Residual on a Policy Document

On a Policy document template there is a field called Cash Residual. This indicates how much cash is remaining, after the initial investment was made. This will typically have a value other than zero since normally the investment can’t be bought for exactly the amount of money provided, and this value will remain in the investor’s cash account.

The cash residual is calculated as follows:

1. If there is an investment instruction into the fund then calculate the difference between the net instruction amount and the amount that bought into the instrument.
2. If there is no investment instruction into the fund, then look for a switch instruction where Cash is sold and the investment is bought into. Then we can use the difference between the sell of the cash instrument and the buy of the investment, and that will give us the cash residual. This scenario happens when an investor had a previous investment that reached maturity and now wants to buy into a similar investment. Then a new contract is opened for the new investment, the money is adjusted to the new contract (as cash), and a switch is created to buy from cash into the new investment.
3. If both of the above don’t exist, then we use the cash balance on the day of the first buy.

See Generating a Policy document for steps on how to see the policy document for a specific investment.

Last Updated on 1 year ago by Adrienne Dill