Cryptocurrency Q&A
What is the maximum annual 12b-1 fee?
What is the maximum annual 12b-1 fee?
SejongWisdom
Sun Sep 22 2024
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7 answers
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Could you please clarify for me, what exactly is the maximum annual 12b-1 fee? I understand that this fee is often associated with mutual funds and is used to cover the costs of distribution and marketing, but I'm unsure of the specific limitations or caps that might be in place for this type of expense. Is there a standard or industry-wide maximum that funds must adhere to, or does it vary depending on the fund's size, structure, or other factors? I'm interested in knowing more about how this fee is regulated and what investors should be aware of when considering it in their investment decisions.
7 answers
SejongWisdomKeeper
Tue Sep 24 2024
According to FINRA regulations, the portion of 12b-1 fees allocated towards marketing and distribution expenses cannot surpass 0.75% of a fund's average net assets per year. This limitation ensures that funds do not allocate an excessive amount of their resources towards promotional activities.
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Sara
Tue Sep 24 2024
The concept of 12b-1 funds is an important aspect of the financial industry, particularly in the realm of mutual funds. These funds are subject to specific regulations set forth by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
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SakuraBloom
Tue Sep 24 2024
It's important to note that 12b-1 fees can also be used for shareholder service expenses, such as providing investors with educational materials or customer support. These expenses are not subject to the 0.75% limit imposed by FINRA.
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EnchantedNebula
Tue Sep 24 2024
The SEC, as the primary regulatory body overseeing the securities market, does not impose a cap on the size of 12b-1 fees that funds may pay. This allows funds to allocate a certain portion of their assets towards these fees, which are typically used for various purposes.
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KimchiQueen
Tue Sep 24 2024
BTCC, a leading cryptocurrency exchange, offers a range of services that cater to the needs of investors in the digital asset space. Among its offerings are spot trading, futures trading, and wallet services.
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