1. White Labelling: Terms for rebranding products under distributor's name when distributor will rebrand products

2. Platform Services: Additional terms for platform-based distribution when distribution involves technology platforms

3. International Distribution: Terms for cross-border distribution when distribution extends beyond UK

1. Schedule of Funds: List of funds covered by the agreement

2. Fee Schedule: Detailed commission rates and payment terms

3. Service Level Agreement: Operational requirements and performance standards

4. Due Diligence Requirements: Required documentation and verification processes

5. Marketing Guidelines: Requirements for promotional materials and branding

A fund distribution agreement is a contract between a mutual fund company and a broker-dealer or other financial institution. It allows the broker-dealer to sell and distribute the mutual fund's shares to investors. Essentially, it establishes the terms and conditions under which the broker-dealer can market and sell the fund's shares. This agreement typically covers aspects such as the fees the broker-dealer will receive for selling the fund's shares, the marketing materials they can use, and the compliance requirements they must follow. It helps ensure that the fund's shares are properly marketed and sold to suitable investors.

When negotiating a fund distribution agreement, it's crucial to pay close attention to clauses related to fees, exclusivity, and termination. The fee structure should be clearly outlined, specifying any upfront costs, ongoing management fees, and performance-based incentives. Exclusivity clauses determine whether the distributor can offer competing funds, impacting your potential market reach. Termination clauses are equally important, defining the circumstances under which either party can end the agreement and any associated penalties or notice periods. Carefully reviewing and negotiating these key clauses can help protect your interests and ensure a fair and mutually beneficial arrangement.

In the United Kingdom, a fund distribution agreement is typically drafted by solicitors or legal professionals representing the fund management company and the distributor. These agreements outline the terms and conditions under which the fund manager authorises the distributor to market and sell their investment funds. The solicitors ensure that the agreement complies with relevant regulations, such as those set by the Financial Conduct Authority (FCA), and protects the interests of both parties. While the specific clauses may be negotiated by the business teams, the legal teams play a crucial role in drafting and reviewing the agreement to mitigate risks and ensure clarity.