This article demonstrates how updates to rules in FundApps will affect the results when rerunning files with previous NAV dates.
Contents
Rule Fields
Rule versions, NAV dates and Approval dates
Rule Fields
It is important to understand the following rule fields:
Valid
The ‘Valid from date’: The date from which the rule is in place and should be applied to your positions i.e. from when the relevant regulation or legislation came into force. In the case where we update the rule to reflect a clarification or to enhance a previously inaccurate interpretation, the Valid from date will stay the same. Only when a rule update reflects a change in the source regulation, will the Valid from date change.
ApprovedOn
This is the date where you as a user approve a change or update to a rule. Note that an approval of a rule with a Valid from the date in the past will apply retroactively to any files that you rerun with a NAV date after that Valid from date.
Rule versions, NAV dates and Approval dates
With the above in mind, please note that FundApps will always run the newest version of a rule that is valid and approved by you on a given NAV date, even if the NAV date was before your approval.
In order to demonstrate this, we have created five illustrative scenarios:
Scenario 1A - NAV date after new rule version with unchanged reg
Scenario 1B - NAV date after new rule version with the new reg
Scenario 2A - NAV date before new rule version with unchanged reg
Scenario 2B - NAV date before new rule version with the new reg
Scenario 3 - Nav date after new, but unapproved rule version
Scenario 1A NAV date after new rule version with unchanged reg
Scenario 1A: An old rule version is in place at (1). At (2) a new rule version is released. The new rule version is approved by the user at (3). The underlying regulation hasn’t changed, so the new rule version’s Valid from date will be the same as the previous versions, retroactively overriding the older version between (1) and (2). Today (5), we wish to re-run a file from a previous NAV date (4).
Outcome: No surprise - The file is run on the new rule version.
Scenario 1B NAV date after new rule version with the new reg
Scenario 1B: An old rule version is in place at (1), at (2) a new rule version is released to reflect changes in the underlying regulation. The Valid from date of the new version is at (2)
The new rule version is approved by the user at (3), so any rerun of a file with NAV date after (2) will now run on the new rule version. Today (5), we wish to re-run a file from a previous NAV date (4).
Outcome: No surprise - The file is run on the new rule version.
Scenario 2A NAV date before new rule version with unchanged reg
Scenario 2A: An old rule version is in place at (1). At (3) a new rule version is released. The underlying regulation hasn’t changed, so the new rule version’s Valid from date will be the same as the previous versions, retroactively overriding the older version between (1) and (3). The new version is approved by the user at (4). Today (5), we wish to re-run a file from a previous NAV date (2).
Outcome: Risk of new alerts - Since the newly approved rule version reflects additional clarification or interpretation of an unchanged underlying regulation, the Valid from the date for the new rule version is (1). This means that when the file is rerun on NAV date (2), the new rule version will retroactively apply, even though this wasn’t approved until (4).
This potentially means that new breaches/disclosures alerts will emerge that weren’t triggering under the old rule version.
Scenario 2A Example
Example: An existing shareholding disclosure regulation has been in place since 1 Jan 2016.
On 17 July, FundApps released a new rule version based on Aosphere releasing an update to their relevant memorandum. Aosphere’s update was based on a clarification to the interpretation given by the regulator i.e. the underlying regulation didn’t change.
On 20 July, the updated rule version was approved by the user in FundApps.
Today 24 July, the user re-ran a positions file from NAV date 17 June to review some positions unrelated to the new rule version. However, the user noticed that the disclosures triggered today were different from those that were initially triggered on 17 June.
Since the rule version approved on 20 July reflects additional clarification of an unchanged underlying regulation, it retroactively overrides the previous version and is valid from 1 Jan 2016.
Re-running a positions file with a NAV date after 1 Jan 2016, will then potentially trigger new disclosures.
Scenario 2B NAV date before new rule version with the new reg
Scenario 2B: An old rule version is in place at (1). At (3) a new rule version is released to reflect changes in the underlying regulation. The Valid from date of the new version is at (3). The new version is which is approved by the user at (4). Today (5), we wish to re-run a file from a previous NAV date (2).
Outcome: No surprise - Since the new rule version was neither valid nor approved at (2), the NAV date of the file being rerun, the old rule version will run as this was the most recent valid rule and approved the rule at the time of the NAV date.
Scenario 3 Nav date after new, but unapproved rule version
Scenario 3A: An old rule version is in place at (1). At (2) a new rule version is released. The underlying regulation hasn’t changed, so the new rule version’s Valid from date will be the same as the previous versions, retroactively overriding the older version between (1) and (2). However, the new version hasn’t been approved yet, so when we today (4) rerun the file from NAV date (3), the newest version of the rules will not apply.
Outcome: Risk of missing alerts - Since the new rule version wasn’t approved prior to (4), a file rerun at NAV date (3) will run on the old version of the rules, potentially omitting disclosure or breach alerts.
If at a later stage, the user approves the new rule version and subsequently reruns the file at NAV date (3), the new rule version will apply (similar to scenario 1A).
Scenario 3 Example
Example: An existing shareholding disclosure regulation has been in place since 1 Jan 2016.
On 24 July, FundApps released a new rule version based on Aosphere releasing an update to their relevant memorandum. Aosphere’s update is based on the interpretation given by the regulator i.e. the underlying regulation didn’t change.
The rule has not yet been approved by the user
Today on 26 July, the user re-runs yesterday’s file i.e. NAV date 25 July
Since the new rule version is not approved, a file rerun at NAV date 25 July will run on the old version of the rules, potentially omitting disclosure or breach alerts.