Investment Company Share Practices

What this video covers

• The 0.25% combined 12b-1 and service fee ceiling that separates a true no-load fund from a prohibited no-load claim
• How front-end loads, contingent deferred sales charges (CDSCs), and closed-end underwriting fees each independently kill the no-load label
• Why a purchase below a breakpoint is not automatically a violation, and the three-step duty to check rights of accumulation, disclose letters of intent (LOIs), and avoid breakpoint selling
• Share class suitability: how holding period and fee structure determine whether Class A, Class B, or Class C is appropriate for a customer
• The formal definition of switching as liquidation and repurchase of fund shares in a different portfolio with similar objectives without reasonable grounds, plus the duplicative holdings trap
• The required yield and total return disclosures, the age substitution rule for funds younger than ten years, and the absolute prohibition on comparing mutual funds to bank deposits or FDIC insurance
• Why delivering a prospectus alone does not satisfy full and fair disclosure, and the independent personal obligations of both the broker-dealer (BD) and the agent