Contingent Deferred Sales Charge Also know as a back end load; is a mutual fund sales charge that is assessed upon the redemption of the shares. The amount of the sales charge to be assessed upon redemption decreases the longer the shares are held.
Applying "Contingent Deferred Sales Charge" to Securities Exams:
An investor in an open end mutual fund that charges a contingent deferred sales charge will only pay a sales charge when the investor sells the shares. The amount of the sales charge paid by the investor will be contingent on how long the investor has owned the mutual fund shares. In many cases investors who have held the mutual fund for a number of years will not pay any sales charge when the redeem their shares. Many funds B shares will convert to A shares after a number of years.