Update TER In Seconds [SEBI Guidelines]

Posted under case studies on March 17 , 2020 by Nikita Prashar


Definition

TER stands for the total expense ratio (TER). It is a measure of the total costs associated with managing and operating a leading investment fund, such as a mutual fund[MF]. These costs consist primarily of management fees and additional expenses, such as trading fees, legal fees, auditor fees, and other operational expenses.


Requirement Gathering and Solutioning

One of our clients in the financial services sector, was having a difficult time creating the TER report manually. They often had to rework on the reports because of high error-rate and fixing those errors would take a major chunk of their time. Our implementation team was already based there, working on an investment management project. The client approached our implementation team to check if SheetKraft could help in automating the report. The implementation team understood the current process, client requirements and the kind of errors in the report. Then the SheetKraft team automated the report generation.

Fig 1


Time Consuming Process for Updating TER

As per the SEBI guidelines, MF’s must update the Total Expense Ratio daily on their website, which means even a marginal difference needs to be updated. This task, if done manually, is time consuming and is prone to a high error rate. The process starts with the resource receiving the TER file which is generated by the in-house team or by a third-party vendor. This report needs to be compared with the values stored in the database across all funds values. The values for today are compared with values for all the previous dates from the start of the month. Any difference in previous data with respect to validation checks and report matured and new schemes in the report, needs to be reported and forwarded to the concerned department which in turn would fix the data with correct values after checking the report. Once the modified TER report is generated, it is uploaded to the website.

Fig 2


Efficient and Quick Update of TER

The manual TER report generation would take 2 – 3 hours per day. But with the implementation of SheetKraft’s solution, this task can be finished in 2 – 3 minutes. The TER report is received via email. SheetKraft identifies this email using unique keywords set as the subject line of the email. The TER report attached in the email is downloaded. The SheetKraft solution would then compare the values of the attachment with the data stored in the database. SheetKraft will check for new MF schemes and matured MF schemes. New schemes are added, and matured ones are removed from the TER report. A report is generated for the schemes with value mismatch between the file received and the database which is then forwarded to the concerned department for the approval, the mail sent is created in a format which lets a user verify the data using their mobile devices, as shown on the right. The error list is generated and mentioned over the email so make it easy for the person to verify the data report, a sample mail can be seen below. Once the error report has been approved, SheetKraft uploads the TER report on the website.

The error list is generated and mentioned over the email so make it easy for the person to verify the data report, a sample mail can be seen below

Fig 3

Once the error report has been approved, SheetKraft uploads the TER report on the website.



TAGGED:TEROperationsMutual FundsSEBI


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