Transaction fees for a fund
FA Fund Management lets you calculate subscription and redemption fees in the incoming trade orders automatically when you accept NAV. With automatic trade order execution turned on, the system also generates transactions based on the trade orders.
You can calculate the fees as a percentage of the trade amount or as a fixed amount per transaction. The fee parameters are entered in the share class settings. You can also provide a discount on the fee to certain clients by setting the discount percentage in the client’s portfolio.
Trade order amount with transaction fees is calculated in the following way:
Subscriptions executed with trade amount: Trade amount = Subscription amount - Fee
Subscriptions executed with units: Trade amount = Number of units * NAV + Fee
Redemptions executed with trade amount: Trade amount = Redemption amount + Fee
Redemptions executed with units: Trade amount = Number of units * NAV - Fee
Set up subscription and redemption fees
To set up automatic calculation of subscription and redemption fees:
Make sure you have automatic order execution turned on in FA Fund management app (Fund wizard → Order execution tab).
Set up transaction fees for a share class. Open the Share class wizard, Fee structure tab in FA Fund management application, and enter the fee parameters:
- Calculate fee for net trade amount-based subscriptions
The amount from which the subscription fee is calculated in net trade amount-based trade orders: order trade amount or the sum invested in the fund.
- Define default transaction fees
Settings for subscription and redemption fees calculated automatically and included in the transaction:
- Cost percentage
Fee percentage to calculate the fee amount.
To set the fee as a fixed amount per transaction, enter "0" as a cost percentage and then specify the fee amount in the Minimum field.
- Minimum
The minimum fee amount to charge.
- Currency
Fee currency, automatically set to the share class currency.
To define a discount for a client (if needed), open the client’s portfolio, Fees tab in FA Back, and enter the discount parameters:
- Cost type
Cost types for the fee. Choose "Subscription discount" with "DISCS" cost type for a discount on the subscription fee. Choose "Redemption discount" with "DISCR" cost type for a discount on the redemption fee.
- Value
Discount as a percentage from the fee. For example, to execute subscriptions and redemptions without a fee, enter 100.
The discount is applied to all future subscriptions and redemptions in all funds.
Note that if you define a client discount, the minimum fee amount set on the share class level isn’t used.
After you set up the transaction fees, you can see them in the subscription and redemption transactions as you accept NAV.
Questions about subscription and redemption fees
I want to set up an exceptional transaction fee for some trade orders. Is this possible?
Yes, you can define subscription and redemption fees in the Trade order window. Enter the fee percentage in the Internal info field (for example: fee=0.5), or enter the fee amount in the fee field.
I rolled back NAV and accepted it again, but my fees in trade orders are not recalculated. What should I do?
We recommend using automatic order execution to have your fees recalculated correctly, Otherwise, you need to check the fee amounts after the rollback as they aren't updated automatically.