Date: 7 Dec 1998 \JOHNNY\1208\TRUST.TXT Note on "(5C) Margin Client Trust A/C Report" 1. The Trust A/C Report is applicable to "Margin" & "Custodian" Clients. "Internal" Clients are also included. But "Cash" Clients are not included. 2. On each day, the daily NET Debit/Credit amount of the above types of client will be processed. 3. Internally, SB keeps track of 2 days credit amount and the trust a/c amount. 4. If the daily NET amount is debit, this debit amount will be deducted from the 1st day credit amount. If the 1st day credit amount is not sufficient, the 2nd day credit amount will be deducted also. If the 1st & 2nd day credit amount are not sufficient, the trust a/c amount will be deducted accordingly, which implies "Fund transfer from Trust a/c to current bank a/c". 5. Next, if there is 2nd day credit amount, the 2nd day credit amount will be added to trust a/c amount, which implies "Fund transfer from current bank a/c to trust a/c". 6. The 1st day credit amount will then be moved to 2nd day credit amount. 7. If the daily NET amount is credit, this amount will be moved to 1st day credit amount. 8. SB counts banking days (Monday to Saturday) in determine the days of a credit amount held. 9. User performs fund movement on next banking day according to current day "Trust A/C Report" Example: Case 1, Receive a fund and held 4 days One day Two days Trust A/C Credit Credit Amount ------- -------- --------- T+0 day (Mon) Receive 60,000.- 60,000.- T+1 day (Tue) no B/S/P/R trans 60,000.- T+2 day (Wed) no B/S/P/R trans 60,000.- T+3 day (Thu) Transfer fund 60,000.- from Bank C/A to Bank Trust A/C. ------------------------------------------------------------------------------ Case 2, Receive a fund and buy stocks One day Two days Trust A/C Credit Credit Amount ------- -------- --------- T+0 day (Mon) Receive 100,000.- 100,000.- T+1 day (Tue) Buy 30,000.- stock 70,000.- (the 1 day Credit was deducted and remained 1 day credit amount was moved to 2 days credit) T+2 day (Wed) Buy 20,000.- stock 50,000.- (the 2 days Credit was deducted and remained 2 days credit amount was added to trust a/c) T+3 day (Thu) Transfer fund 50,000.- from Bank C/A to Bank Trust A/C. ------------------------------------------------------------------------------ Case 3, Receive a fund and buy stocks and client balance become debit. One day Two days Trust A/C Credit Credit Amount ------- -------- --------- T+0 day (Mon) Receive 100,000.- 100,000.- T+1 day (Tue) Receive 50,000.- 50,000.- 100,000.- (the 1 day Credit was moved to 2 days credit) T+2 day (Wed) Buy 130,000.- stock 20,000.- (fist 1 day credit was deducted, and next 2 days credit was deducted, remained 2 days credit amount was added to trust a/c) T+3 day (Thu) Transfer fund 50,000.- from Bank C/A to Bank Trust A/C. T+3 day (Thu) Buy 40,000.- stock (Client balance become debit, the trust a/c amount was deducted) T+4 day (Fri) Transfer fund 20,000.- from Trust A/C back to Current A/C. ------------------------------------------------------------------------------ NOTE: Print "Trust A/C Report" in Saturday ==================================== If fund is received from a client (either by "R" or "S" transactions), SB will start to count credit days effective from the T-day, and on the 3rd banking day such fund will be indicated to be deposited to the "Trust A/C". User uses this report to determine the fund transfer between Current A/C and Bank Trust A/C. To follow the rule exactly, the Trust A/C Report printed on Friday should be used on Saturday. And on Saturday and after SB was System End as at Friday, user needs to re-print the Trust A/C Report and uses this report on Monday. Example 1: on 1 July 1996, a margin client deposit an amount 1000.- Day Date Week Count -------------------------- 1 July 96 Mon 1 2 July 96 Tue 2 3 July 96 Wed 3 indicate to deposit 1000 to "Trust A/C" 4 July 96 Thu 4 please transfer 1000 from "Current A/C" into the "Trust A/C" as indicated by 3 July "Trust A/C Report" Example 2: on 4 July 1996, a margin client deposit an amount 2000.- Day Date Week Count -------------------------- 4 July 96 Thu 1 5 July 96 Fri 2 6 July 96 Sat 3 indicate to deposit 2000 to "Trust A/C" 7 July 96 Sun 8 July 96 Mon 4 please transfer 2000 from your "Current A/C" into the "Trust A/C" as indicated by 7 July "Trust A/C Report" BUT if user forget to print "Margin Client Trust A/C Report" on Saturday 6 July 96, the "indication to deposit 2000 to "Trust A/C" will be appeared on 8 July 96 !! Example 3: on 4 July 1996, a margin client sold a stock with amount 3000.- Day Date Week Count -------------------------- 4 July 96 Thu 1 Settlement Date is 8 July 96 5 July 96 Fri 2 6 July 96 Sat 3 indicate to deposit 3000 to "Trust A/C" 7 July 96 Sun 8 July 96 Thu 4 please transfer 3000 from your "Current A/C" into the "Trust A/C" as indicated by 6 July "Trust A/C Report"