DISC 6.5 Transaction costs

1. (1) Transaction costs are explicit costs or charges, other than one-off costs, that are incurred in the course of the buying or selling of investments underlying or otherwise relating to a consumer composite investment.
2. (2) Transaction costs include but are not limited to:
   1. (a) broker commissions, exchange fees and other payments to agents, intermediaries or trading venues;
   2. (b) stamp duty and other taxes or levies; and
   3. (c) legal expenses.

1. (1) Subject to (2), transaction costs must be calculated on an annualised basis, based on an average of those transaction costs under this section incurred in relation to the consumer composite investment over the previous 36 months.
2. (2) Where the consumer composite investment has been operating for less than 36 months, transaction costs must be estimated on a reasonable basis.

The following factors will normally be relevant to the estimate in  DISC 6.5.2R(2): 

1. (1) actually incurred costs and charges;
2. (2) the actual or anticipated rate and volume of turnover of the consumer composite investment's portfolio of underlying assets;
3. (3) market rates for the sort of fees or charges expected to be incurred as part of the establishment, operation, management or carrying out of the consumer composite investment; and
4. (4) anticipated changes in costs or charges over the initial 36 months of operation of the consumer composite investment.