contingent deferred sales charge

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Contingent deferred sales charge (CDSC)

The formal name for the load of a back-end load fund.

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.

contingent deferred sales charge

A mutual fund redemption fee that is reduced or eliminated for specified holding periods. For example, a fund might charge a 6% redemption fee for a holding period of less than one year, a 5% fee for a holding period of one to two years, and so forth. Mutual funds with a contingent deferred sales charge also generally levy an annual 12b-1 fee.
References in periodicals archive ?
Summary: Passengers leaving Lebanon from Monday will have to pay higher exit fees following a tax hike law that went into effect on Oct.
The Financial Conduct Authority (FCA) said early exit fees for people accessing their pensions will be capped at 1%.
Firms will not be allowed to apply early exit fees to pension contracts taken out from April next year.
The firms will be required to pay exit fees to leave.
BANKING AND CREDIT NEWS-March 4, 2016-Investigation into exit fees faced by insurers
M2 EQUITYBITES-March 4, 2016-Investigation into exit fees faced by insurers
They had been found guilty of forging and altering documents using the Dubai Naturalisation and Residency Department system, paying off exit fees for more than 1,000 people who had overstayed their visas.
The action plan follows an announcement by Mr Osborne this week that a Treasury consultation will be launched next month, to make sure that people are not charged excessive early exit fees and are treated fairly when moving their pension to a company that offers them flexible options to access their savings.
ON incorrectly charged exit fees and/or overcharged customers after it introduced price rises in January 2013 and January last year.
Companies are not supposed to apply exit fees if a customer signals their intention to move supplier within the standard 30-day notice period of a price rise.
The report said the FCA was planning to review 30 million policies that were decades old and that it was considering scrapping policy exit fees.
You may not need to include the exit fees as these normally go down to zero if you stay long enough in a fund.