The article consists of the following:
- Where can I find a summary of all my costs?
- Purpose of the Annual cost report
- What happened to Capital gain and Withholding tax in my Cost summary?
Where can I find a summary of all my costs?
You can find a summary of all costs in the Cost summary section of the Portfolio report and the Annual cost report. In the Portfolio report ‘External product cost’ are the expected indirect costs of instruments, whereas in the Annual cost report, it is indirect costs that have materialized for instruments.
Indirect costs are costs which are not charged or withdrawn from your cash balance, nor do they show up under transactions. This type of cost is included in the instrument charged by the external provider.
You can find a summary of all the costs in the Portfolio report by going to the main menu > Account activity and reports > Account reports > Download report > Portfolio report
You can find a summary of all the costs in the Annual cost report by going to the main menu > Account activity and reports > Account reports > Annual cost report
Purpose of the Annual cost report
The Annual cost report has the purpose of disclosing all the costs that occurred in the chosen year. It has three subsections about cost:
- P/L development – Shows the development of P/L and total cost during the year
- P/L breakdown – Shows costs on a Product and Instrument level
- Cost summary – Shows all the cost types divided between Investment service costs, Financial Instrument costs and Third-Party payments
The report will be generated in the first quarter of the year for the previous year. It will be available on the Platform, and you will receive a notification in an email. For any significant cost changes, we will inform you about them. See section If costs are updated for more information.
Below is a description of the cost classifications:
| COST TYPE | COST DESCRIPTION | COST BREAKDOWN |
| Investment Management Costs | ||
| Transaction costs | Transaction costs are costs and charges that are related to transactions performed by the investment firm or other parties. Transaction service costs are one-off trading costs charged for investment services such as commissions, FX spreads, currency cuts, exchange fees, and transactional taxes. | Download Investment Transaction Costs |
| Ongoing costs | Ongoing costs are ongoing costs and charges paid to investment firms for their services provided to the client. These are incurred throughout the lifetime of a trade, such as account interest payments, and ongoing fees to brokers and Money managers. | Download Investment Ongoing Costs |
| Ancillary costs | Ancillary service costs are any costs and charges that are related to ancillary services that are not included in ongoing costs. These include custody fees and service fees charged directly by the investment firm and taxes on these items. | Download Investment Ancillary Costs |
| Incidental costs | These include adjustments and corrections and can also include performance fees charged directly by a Money Manager or agent charged separately from the ongoing charges. | Download Investment Incidental Costs |
| Financial Instrument Costs | ||
| Ongoing costs | Ongoing product costs include ongoing costs and charges related to the management of the financial product and are deducted from the value of the financial instrument during the investment. These include FX rollover costs and P/L Interest, CFD financing charges, Borrowing Costs and Carrying costs. Ongoing product costs also include external ETF and Mutual Fund costs. | Download Instrument Ongoing Costs |
| Transaction costs | Transactional product costs include Fund House Commissions, FX swap currency cuts, withholding taxes, stamp duties and clearing fees. | Download Instrument Transaction Costs |
| Third-Party Payments | ||
| Third-party payments | Third-party payments are payments received by investment firms or other parties in connection with the investment service provided to a client. They are itemised separately and expressed both as a cash amount and as a percentage. These include fund inducements and retrocessions, partner commissions and revenue-sharing |
Download 3rd Party Payments
|
If costs are updated
If your costs have been updated, we will generate new reports and communicate the change to you. The most common updates are caused by:
- External product costs: These are costs received from external providers of instruments. If these costs are updated from external providers of instruments after Q1, a new Annual cost report is distributed in case these costs exceed certain regulatory set thresholds.
- Securities lending fee: Note that this is not a new cost, it is simply now being reflected in the report following the ESMA statement on securities lending. Read more about Stock lending (Securities lending)
- Any other cost: If any other cost is corrected after Q1 a new Annual cost report is distributed in case these costs exceed certain regulatory set thresholds.
Example of Cost Summary
What happened to Capital gain tax and Withholding tax in my Cost summary?
In ESMA’s Q&A on MiFID II and MiFID it is stated that “Firms could decide whether to include or not in their costs and charges disclosure taxes that relate to the income/revenue generated by the investment in which the client has invested."
Hence, Saxo Bank has decided to remove Capital gain tax and Withholding tax amounts from the Cost summary in the 2024, and onwards, Annual cost report and in the Portfolio report. By doing so, we align our reports with industry standards.
Please note, that the only taxes that are affected are the ones related to income/revenue generated by invested capital, not other tax items like tax on products and services.