Application of Transaction – and Deal Fees
See Setting up transaction fees
When an Investor Transaction Fee has been set on a Dealer, the system generated Dealer Instruction would take the Transaction fee into consideration and reduce the buy instruction amount with the transaction fee. In the case of an amount sell instruction, the instruction amount will be inflated with the transaction fee amount. With a unit sell, the units to sell will not be inflated, the amount added to the investor account will be reduced by the transaction fee.
For instance, the generated dealer instruction will be for $ 99 428.29 on a $ 100 000 investment where a transaction fee of 0,5% (including VAT of 15%) has been set on the dealer
Further options pertaining to transaction – and deal fees are set on the Contract Note for confirmation:
A. Update a Deal fee amount if needed. The system calculates the % of the deal fee (A1), which can be added to D as a %, which might result in a rounding difference.
Alternatively the button ‘Override transaction fee rate’ (A2) can be used, which will add the exact amount (in the example 50 USD) as a transaction fee to D. If the button is used, the deal fee will be allocated to the transaction fee portfolio selected on the dealer where ‘Is used to recover deal fees?’ has been ticked.
B. The Investor transaction fee can be deducted from the investor account or funded by the Financial service provider.
C. The transaction fee can be priced into the transaction price or taken explicitly.
D. The transaction fee can be adjusted.
Clicking into D
NOTE: With a switch, if you sell multiple funds and buy into one fund, separate buy allocations are created for each sell. If the dealer on the buy charge transactions fees as a fixed money rate, we will charge the amount for each buy.
As an example:
Deal fee set on dealer A as $2.00
Switch instruction (All instruments deal through dealer A):
Sell:
Fund A – $100, Transaction fee $2
Fund B – $200, Transaction fee $2
Buy:
Fund C – $300, Transaction fee $4, as we currently have 2 buy allocations
Also see spreadsheets with different scenarios:
Instrument Buy Instruction with fees – units first
Instrument Sell Instruction with fees – sell extra amount
Last Updated on 5 years ago by Antoinette Van Meyeren