Impose

DEFINITION of 'Impose'

The act of placing a fee, levy, tax or charge on an asset or transaction to the detriment of the investor. The imposition of fees is a common practice in most investment products and services, and may be used as a deterrent to selling or exiting a financial position early.


BREAKING DOWN 'Impose'

Fees are inevitable, regardless of whether you are a small retail investor or a multinational investment bank. Just about every financial service involves a payment to the party that helps to facilitate the transaction. Most fees should be made known to investors before they purchase a new security or move funds in a way that will incur a charge of some kind.

Many fees are imposed not at the time of transaction, but instead levied on an annual basis as a percentage of assets or holdings.

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