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planned and executed by Fidelity Investments Retail Marketing Co.
(Retail Marketing). The marketing efforts of the institutional
RIC's are planned and executed by FIIS. In addition to marketing
and distribution efforts on behalf of existing RIC's, Retail
Marketing and FIIS are responsible for coordinating the
establishment and introduction of new RIC's for retail and
institutional distribution, respectively.
The majority of the funds managed by petitioner are retail
funds. All except two of these retail funds are "open-end"
funds, which means that shareholders in the RIC may redeem their
shares upon demand at a price based upon net asset value. During
the years in issue, many of the equity retail RIC's were "load
funds", which means that the sale of shares in the RIC's was
subject to a sales charge. Most of the institutional and all the
fixed income and money market RIC's were "no-load" funds, not
subject to a sales charge. During the years in issue, petitioner
began to eliminate the load charge for most of the equity RIC's
it managed, either temporarily or permanently.3 Petitioner also
expanded its "exchange privilege" so that a shareholder could
redeem the shares in one RIC to purchase shares in another RIC in
the Fidelity family incurring little or no additional load
charge, depending upon whether the load on the purchased shares
was greater or less than the load on the redeemed shares.
3Currently, most of the retail funds managed and advised by
petitioner are "no-load" mutual funds.
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Last modified: May 25, 2011