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8.1.20
Methodologies of Trailer Commission Computation
The maintenance required for various methods of computation for trailer commission is
indicated below:
Methodology
Trailer commission
Accrual 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
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 trailer commission (based on Opening
and Closing AUM for
the month)
Quarterly trailer commission (based on AUM
on last day of quarter)
Monthly or greater
than Monthly;
should be less than
payment frequency
Monthly
Quarterly
Half yearly
Yearly
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
Quarterly trailer commission = (AUM on last day
of quarter * TC rate) / 4
Quarterly or greater
than Quarterly;
should be less than
payment frequency
Quarterly
Quarterly or greater
than Quarterly;
should be less than
payment frequency
Quarterly
Quarterly or greater
than Quarterly;
should be less than
payment frequency
Quarterly
Quarterly trailer commission (based on
Average AUM for the
quarter)
Quarterly trailer commission = (Average AUM for
the quarter * TC Rate)/4
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
8-42
Monthly
Quarterly
Half yearly
Yearly
Half yearly
Yearly
Half yearly
Yearly
Half yearly
Yearly