What is a “Ticket Charge”?
A ticket charge in a brokerage account is a fee applied for executing trades, such as buying or selling mutual funds, stocks, bonds, or other securities. Typically, these charges are applied to the ESI registered representative (“RR”) associated with the account and, in certain cases, may be passed on to the client. Additionally, ESI RRs may incur a $25.00 surcharge for placing eligible orders through the ESI trade desk instead of using the Wealthscape platform.
Mutual Funds
TF vs. NTF
On the NFS Brokerage platform, some mutual funds include transaction fees (TF Funds), while others are designated as non-transaction fee funds (NTF Funds). Most loaded mutual funds (A, B, or C shares) typically have transaction fees. To verify whether a fund is classified as NTF or TF, review the Security Details in Wealthscape. Security details can be quickly accessed by clicking on the hyperlink embedded within the mutual fund name in the mutual fund order ticket.
Entering Mutual Fund Ticket Charges
ESI Registered Representatives (RRs) are responsible for mutual fund ticket charges as outlined in the attached schedule. The following guidelines clarify when the charges for a transaction-fee (TF) Mutual Fund can be passed to clients:
- For purchases of loaded mutual funds (A, B, or C shares), the ESI RR is responsible for the ticket charge, while the client pays the sales charge.
- For redemptions or exchanges of loaded mutual funds, the ESI RR may pass the ticket charge to the client.
- For both purchases and redemptions of no-load mutual funds, the ESI RR may pass the ticket charge to the client.
If the ticket charge may be passed to the client on a mutual fund order, the ESI RR should use the Misc. Fee Override field in the mutual fund trade ticket.
Customers pay a $3.50 service fee on ALL transactions in non-managed ESI brokerage accounts. Therefore, if the Misc. Fee Override field is being used to pass ticket charges to the customer, it must include the associated transaction charge, AND the $3.50 service charge.
PIP’s and SWP’s
The ESI registered representative is charged $2.00 per transaction for all mutual fund trades executed by the system under a Periodic Investment Plan or Systematic Withdrawal Plan.
Equity Orders
The ESI registered representative is charged a $17.00 ticket charge on all equity and ETF orders.
The customer is automatically charged a default commission of $29.95 plus $0.03 per share and the RR may charge a higher commission under the firm’s alternate schedule.
For unsolicited orders, the commission is capped at $29.95 plus $0.03 per share (default commission), as the RR’s role is primarily order-taking. The alternative commission schedule for solicited equity orders was established to provide additional compensation for services involved in making a recommendation, such as conducting research.
Please note, ETF transactions in non-managed Brokerage accounts may only be executed on an unsolicited basis due to our firms Reg BI policies and procedures.
Overriding Default Commissions on Equity Orders
If an ESI RR needs to enter a commission value that differs from the firm default ($29.95 plus $0.03 per share) the Commission Override Field must be utilized. The Misc. Fee Override Field should not be used, as we are modifying the firm’s commission schedule.
If no alternative commission amount is specified, the registered representative (RR) will receive a commission of $29.95 plus $0.03 per share. This amount will be processed through the payout grid at the general securities payout rate. The commission will then be reduced by the $17.00 ticket charge, with the remaining balance being the net commission payout.
If a commission override of $0.00 is entered, the RR will receive no compensation for the trade and will incur the $17.00 ticket charge
If a commission override of $17.00 is entered, the RR will receive a $17.00 commission, offset by the $17.00 ticket charge, resulting in zero net compensation on the order.
Fixed Income
The ESI registered representative is charged a $40.00 ticket charge on all Fixed Income transactions. Any commission paid on these transactions will be processed through the payout grid at the general securities payout rate. The commission will then be reduced by the $40.00 ticket charge, with the remaining balance being the net commission payout.
The following table outlines the maximum mark-up or mark-down percentages for Fixed Income transactions by bond type and remaining maturity, expressed as a percentage of the principal amount.
TC7964574(0525)1
