Reasonable and Non-Discriminatory Service Charges

What this video covers

• How to sort a fee into the correct regulatory bucket: the fair-pricing and commission rule for the trade itself, or the reasonableness standard for everything else
• The specific services covered by the ancillary charge standard, including collection of monies, exchange or transfer of securities, safekeeping, custody, and the open-list trap of "including, but not limited to"
• Why the standard applies to any miscellaneous service charge of the same kind, not only the enumerated examples
• The two-part test that every ancillary charge must pass: reasonable in amount and not unfairly discriminatory among similarly situated customers
• The biggest exam trap for this topic: searching for a fixed dollar cap when the rule contains none, only a fact-based reasonableness evaluation
• Why this standard lives inside portfolio risk disclosures, since ancillary fees are a real cost drag on a customer's bottom line beyond commissions and mark-ups