7.13 Methodologies of Trailer Commission Computation
This topic explains about maintenance required for various methods of computation for trailer commission.
The maintenance required for various methods of computation for trailer commission is indicated below:
Table 7-17 Methodology of Trailer Commission Computation
| Methodology | Trailer commission | Accrual frequency | Payment frequency |
|---|---|---|---|
| Daily trailer commission, based on AUM and Trailer Commission (TC) rate | Daily trailer commission = (Daily AUM * TC rate) / 365 | Daily or greater than daily; should be less than payment frequency | Monthly Quarterly Half yearly Yearly |
| Daily trailer commission (based on AUM, Management fee, TC rate) | Daily trailer commission = (Daily AUM * Management fee rate * TC rate) / 365 | Daily or greater than daily; should be less than payment frequency | Monthly Quarterly Half yearly Yearly |
| Monthly trailer commission (based on AUM on last day of month) | Monthly trailer commission = (AUM on last day of month * TC rate)/12 | Monthly or greater than Monthly; should be less than payment frequency | Monthly Quarterly Half yearly Yearly |
| Monthly trailer commission (based on Average AUM for the month) | Monthly trailer commission = (Average AUM for the month * TC rate) / 12
Average AUM for month = Sum(Daily AUM for the month) / Actual number of days in month |
Monthly or greater than Monthly; should be less than payment frequency | Monthly Quarterly Half yearly Yearly |
| Monthly trailer commission (based on Opening and Closing AUM for the month) | Monthly trailer commission = (Average of Opening and Closing balance of AUM * TC rate) / 12 | Monthly or greater than Monthly; should be less than payment frequency | Monthly Quarterly Half yearly Yearly |
| Quarterly trailer commission (based on AUM on last day of quarter) | Quarterly trailer commission = (AUM on last day of quarter * TC rate) / 4 | Quarterly or greater than Quarterly; should be less than payment frequency | Monthly Quarterly Half yearly Yearly |
| Quarterly trailer commission (based on Average AUM for the quarter) | Quarterly trailer commission = (Average AUM for the quarter * TC Rate)/4 | Quarterly or greater than Quarterly; should be less than payment frequency | Monthly Quarterly Half yearly Yearly |
| Quarterly Trailer Commission (based on Opening and Closing AUM for the quarter) | Quarterly trailer commission = (Average of opening and Closing balance of AUM * TC rate) / 4 | Quarterly or greater than Quarterly; should be less than payment frequency | Monthly Quarterly Half yearly Yearly |