deferred sales charge


Also found in: Acronyms.

Contingent Deferred Sales Charge

The formal name for the load in a back-end load fund. A CDSC is the fee paid when a shareholder sells shares in a mutual fund within a certain number of years. That is, when an investor initially buys a share in a back-end load fund, he/she agrees to pay a third party, usually a financial institution or broker, a certain percentage of the share's value if he/she decides to sell it within five to 10 years, depending on the specific nature of the agreement. The CDSC usually declines by the year until the maximum number of years is reached. See also: B-share.

deferred sales charge

A fee levied by some open-end investment companies on shareholder redemptions and by many insurance companies on annuities. The charge of up to 5% of the value of the shares being redeemed frequently varies inversely with the period of time the shares have been owned. A deferred sales charge is indicated in mutual fund transaction tables in newspapers by the symbol r. Also called back-end load, exit fee, redemption charge. See also contingent deferred sales charge.
References in periodicals archive ?
Without a full explanation of higher annual fees, contingent deferred sales charges and "breakpoints" for quantity discounts, a customer might naturally assume that no front-end cost is the way to go.
Spurring adoption of Rule 12b-1 plans during its early years was a development not anticipated by either the SEC or the industry (110) when the rule was adopted: use of 12b-1 fees in connection with fund classes featuring so-called "contingent deferred sales charges," often called "CDSCs" or "CDSLs," (111) used to market load funds.
The product carries no charges at the time of purchase, no surrender fees, no contingent deferred sales charges and no annual contract administrative charge.
Also investors were sold Class "B" mutual fund shares that carry deferred sales charges (loads) and higher internal expenses than Class "A" shares.
The asset-based fee reductions are available to service programs without contingent deferred sales charges.
Withdrawals may be subject to deferred sales charges, and withdrawals before age 59u may be subject to IRS penalties and income tax.
The Board also approved the waiver of contingent deferred sales charges ("CDSCs") upon redemptions of the Fund's shares on or after May 5, 2006.
In the event the owner of the annuity wishes to redeem the annuity prior to this period, similar to B share annuities, the sale is subject to contingent deferred sales charges to cover costs.
The notes are collateralized by HMFFT 2004-1's participation rights to receive certain asset-based sales charges (ABSC or 12b-1 fees), contingent deferred sales charges (CDSC), and shareholder servicing fees (SSF) for the distribution and servicing of class B mutual fund shares sold to investors.
Namely, FEP 2001-1 receives, from a predetermined set of shareholders in the mutual funds, the asset-based sales charges (12b-1 fees), contingent deferred sales charges (CDSC fees), and shareholder servicing fees (SSF) which are charged to these shareholders.