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American Funds Selling Group Agreement

American Funds Selling Group Agreement: Understanding the Basics

The American Funds Selling Group Agreement is an essential document that outlines the terms and conditions of the relationship between American Funds Distributors (AFD) and the selling group members. This agreement is crucial for both parties because it helps to define each party`s roles and responsibilities, as well as their expectations from the arrangement.

In this article, we will take a closer look at the American Funds Selling Group Agreement and its key provisions:

1. Definitions: The agreement starts with defining the various terms and phrases used throughout the agreement. For example, it explains who the selling group members are, what constitutes a selling group product, and what constitutes a selling group sale. This section ensures that both parties have a common understanding of the terms used in the agreement.

2. Appointment of Selling Group: The agreement outlines the appointment of the selling group members, including the requirements for qualifications and the obligations of both parties. The selling group members are authorized to sell American Funds products on behalf of AFD, subject to the terms and conditions outlined in the agreement.

3. Selling Group Product: This section defines the American Funds products that the selling group members are authorized to sell. This includes mutual funds, exchange-traded funds (ETFs), and other investment products offered by AFD. It also outlines the restrictions on the selling group members from selling unauthorized products.

4. Compensation: Compensation is a critical aspect of the agreement for selling group members. This section outlines the compensation structure, including commissions and other benefits, provided to the selling group members. It also explains the basis for calculating commissions, the payment procedures, and the means of determining the selling group member’s eligibility for compensation.

5. Marketing and Sales Materials: The agreement provides guidelines for marketing and sales materials to be used by the selling group members. This includes the use of trade names, trademarks, and service marks owned by the American Funds, as well as the guidelines for advertising and customer solicitations.

6. Termination: The agreement outlines the circumstances under which the agreement may be terminated, including the grounds for termination, the notice period required, and the rights and obligations of both parties upon termination.

In conclusion, the American Funds Selling Group Agreement is a crucial document that outlines the essential provisions required for a successful relationship between AFD and the selling group members. It provides clarity on the roles, responsibilities, and expectations of both parties and helps to ensure a transparent and fair relationship. Understanding the provisions of this agreement is essential for any selling group member.

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