23 June 2014 -- Washington DC-based The Financial Industry Regulatory Authority (FINRA) said that it has fined Merrill Lynch Pierce Fenner & Smith Inc (NYSE: BAC) USD 8m for failing to waive mutual fund sales charges
for certain charities and retirement accounts.
The implementation of account-level sales charges
is not required by the proposal.
A breakpoint discount is a reduced sales charge
based on the dollar amount of the purchase - the higher the amount the greater the discount.
They should not be excessive relative to can-charge management fees; sales charges
are just a way to get professionals to help sell the funds.
For investments of less than USD 100,000 the sales charge
will drop from 4.
According to the agency, the firm relied primarily on its registered representatives to apply appropriate UIT sales charge
discounts to customer purchases, but did not ensure that the sales charge
discounts were identified and calculated accurately.
During this period, [Securities America] failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that eligible customers who purchased mutual fund shares received the benefit of applicable sales charge
waivers," FINRA said.
The refund would equal the sales charge
deducted in the first policy year;
As FINRA explains, Class A shares typically have lower fees than Class B and C shares, but charge customers an initial sales charge
That is, you don't pay a sales charge
or commission to invest or to take your money out.
41 million for its failure to provide investors with sales charge
discounts in eligible UIT transactions, its failure to ensure that investors received the benefit of Net Asset Value (NAV) transfer programs in applicable mutual fund purchases and for suitability violations related to the sale of Class B and C mutual fund shares.
3 million, LPL will pay restitution to eligible customers who purchase or purchased mutual funds without an appropriate sales charge
waiver from Jan.