AMFI Exam Tips – Series-10

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This chapter examines the various types of fees shareholders pay and contains the following topics

Non-Financial Transactions
Financial Transactions
Purchases
Liquidations
Exchanges
Transfers

Most non-financial transactions are requests for changes to some aspect of an account. Following are some of the most commonly changed features:

· Name
· Address
· Financial consultant
· Account registration
· Letter of intent
· Reinvestment optionsvarious automatic purchase and/or liquidation features

As transfer agent for MLAM, FDS Inc., has responsibility for opening and maintaining direct accounts, as well as for issuing certificates upon client request. These are also considered non-financial transactions

Investor initiated financial transactions include:

· Purchases
· Liquidations
· Exchangestransfers.

Fund initiated financial transactions include:

· Dividends and capital gain distributions
· Reinvestments (based on an investor’s selected option)
· Conversions
· Mergerssplits.

Liquidations are processed at one of the following prices:

· NAV
· NAV less any applicable CDSC feesNAV less any redemption fee (and less CDSC if applicable)

An exchange resembles a redemption from one fund and a purchase into another, processed on the same day. Both sides of exchange transactions are priced at NAV, unless a step-up fee is applied to the buy side.

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