1. Secondary Loan Trading
  2. Processing Fee Details
  3. Introduction
  4. Specifying Assignment Fee Details

5.1.1 Specifying Assignment Fee Details

The assignment fee refers to the flat fee that needs to be paid to the agent facilitating the trade. This fee can be paid either by the buyer or the seller fully, or can be shared between the buyer and the seller.

Following steps are involved in capturing and processing the assignment fee associated with a trade contract:
  1. The assignment fee component gets linked to the SLT product in the SLT Product Fee Details screen.
  2. The assignment fee details for a trade contract are specified in the Fee Components screen associated with the contract.
  3. 3. The buyer’s and the seller’s contribution to the assignment fee is captured in this screen.
  4. 4. You can capture the customer number of the agent to whom the assignment fee is to be paid and also indicate the remitter of the assignment fee in the Draft Trade screen and the Trade settlement screen.
  5. 5. Based on the value of Assignment Fee Remitter, Assignment Fee Type, and the buy/ sell attribute of the trade, the assignment fee gets remitted to the agent or the counterparty involved in the deal.
For Split type of assignment fee payments, the split amounts get posted to the agent and counterparty accounts.
The accounting entries posted for different scenarios of assignment fee collection is given below:
Fee Type Bank is Buyer Bank is Seller
Assignment Fee Type =BUYER & BUYER WILL REMIT Dr Expense A/c

Cr Agent A/c

 No entries
Assignment Fee Type =BUYER & SELLER WILL REMIT Dr Expense A/c

Cr Counterparty A/c

 Dr Counterparty A/c

Cr Agent A/c
Assignment Fee Type =SELLER & SELLER WILL REMIT No entries Dr Expense A/c

Cr Agent A/c
Assignment Fee Type =SELLER & BUYER WILL REMIT Dr Counterparty A/c

Cr Agent A/c

 Dr Expense A/c

Cr Counterparty A/c
Assignment Fee Type =SPLIT & BUYER WILL REMIT Dr Counterparty A/c (for the specified fee amount for Seller)

Dr Expense A/c (for the specified fee amount for Buyer)

Cr Agent A/c (for the full Fee amount) 		Dr Expense A/c (for the specified fee amount for Seller)

Cr Counterparty A/c (for the specified fee amount for Seller)
Assignment Fee Type =SPLIT & SELLER WILL REMIT Dr Expense A/c (for the specified fee amount for Buyer)

Cr Counterparty A/c (for the specified fee amount for Buyer)

 Dr Counterparty A/c (for the specified fee amount for Buyer)

Dr Expense A/c (for the specified fee amount for Seller)

Cr Agent A/c (for the full Fee amount)

Parent topic: Introduction