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Subscription and redemption fees

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.

To set up this feature, you need to define the fee parameters (minimum fee amount and fee percentage) in the fund 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:

  1. Make sure you have automatic order execution turned on in FA Fund management app (Fund wizard → Order execution tab). To learn more about automatic order execution in funds, see NAV calculation and automatic order execution.

  2. Set up transaction fees for a share class. Open the Share class wizard, Fee structure tab in FA Fund management application, choose Enable transaction fees and enter the fee parameters:

    Cost percentage

    Fee percentage to calculate the fee amount.

    Minimum

    The minimum fee amount to charge.

  3. 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 redemptions 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.

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