What are the legal maximums for sales loads and 12b-1 fees? May a fund charge a 12b-1 fee and still be advertised as a no-load fund?

The legal maximums for sales loads charged by mutual funds is 8½%, although sales loads now are typically in the range of 4% to 5%. Such sales loads are paid by investors individually. In addition, mutual funds may charge 12b-1 fees as a fund expense in addition to, or in lieu of, sales loads. The annual maximum for 12b-1 fees is 100bp, composed of 75bp for distribution and 25bp for service. Furthermore, the NASD has created a complex formula setting a maximum for sales charges and 12b-1 fees over the life of a mutual fund.
In order to be considered "no load," a fund obviously may not charge a front-end or back-end load. However, the SEC allows the label "no load" to be used by a fund that charges no sales loads and a modest 12b-1 fee -- 25bp or less per year.