Soft commission

Soft commission

Soft commission is commission given in a non-cash form.

Many investment funds prefer to buy things using soft dollars so they can avoid reporting direct expenses to investors who are highly cost sensitive. Thus, soft commission allow institutional funds to use trading commissions to finance their expenses and thereby report lower expense ratios.

However, soft commission frequently raises problems because it is not transparent. Soft commission is often exchanged for better service such as research for counterparty. Cost of research is very difficulty to quantify. Furthermore, soft commission is counted as cost of broking rather than management fee, which makes the management fees look lower than the actual cost to investors.


Wikimedia Foundation. 2010.

Игры ⚽ Поможем решить контрольную работу

Look at other dictionaries:

  • soft commission —    a bribe    Paid in addition to normal commercial commission for the introduction of business:     It is the first time in Imro s history for a breach of rules on soft commissions . (Daily Telegraph, 25 June 1994 the British Investment… …   How not to say what you mean: A dictionary of euphemisms

  • soft commission — An allowable type of inducement under which a guaranteed level of business is given in return for benefits such as research. There are strict rules with respect to the disclosure of such arrangements as well as to the type of benefits that may be …   Financial and business terms

  • Commission Nationale De L'informatique Et Des Libertés — Logotype de la Cnil La Commission nationale de l informatique et des libertés (Cnil) est une autorité administrative indépendante française chargée de veiller à la protection des …   Wikipédia en Français

  • Commission Nationale de l'Informatique et des Libertés — Logotype de la Cnil La Commission nationale de l informatique et des libertés (Cnil) est une autorité administrative indépendante française chargée de veiller à la protection des …   Wikipédia en Français

  • Commission nationale de l'informatique et des libertes — Commission nationale de l informatique et des libertés Logotype de la Cnil La Commission nationale de l informatique et des libertés (Cnil) est une autorité administrative indépendante française chargée de veiller à la protection des …   Wikipédia en Français

  • Commission nationale informatique et liberté — Commission nationale de l informatique et des libertés Logotype de la Cnil La Commission nationale de l informatique et des libertés (Cnil) est une autorité administrative indépendante française chargée de veiller à la protection des …   Wikipédia en Français

  • Commission nationale informatique et libertés — Commission nationale de l informatique et des libertés Logotype de la Cnil La Commission nationale de l informatique et des libertés (Cnil) est une autorité administrative indépendante française chargée de veiller à la protection des …   Wikipédia en Français

  • Commission sharing agreement — ( CSA ) is a type of soft dollar arrangements that allows money managers to separately pay the executing broker for trade execution and ask that broker to allocate a portion of the commission directly to an independent research provider.… …   Wikipedia

  • Soft dollar — The term soft dollars is used to describe certain payments made by institutional investment funds to their service providers. In contrast to hard dollars (actual cash), which have to be reported on the fund s books, soft dollars are incorporated… …   Wikipedia

  • Soft law — The term soft law refers to quasi legal instruments which do not have any legally binding force, or whose binding force is somewhat weaker than the binding force of traditionallaw, often contrasted with soft law by being referred to as hard law …   Wikipedia

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”