|
COPYRIGHT 2006 SourceMedia, Inc.
The Securities and Exchange CommissionOs recent move to clarify what services can be paid for by so-called soft-dollar commissions will put independent research firms on a more level playing field with their bulge-bracket counterparts. And that will put the onus on the OindiesO to prove their worth in direct competition.
OThe main outcome of the SECOs July 12 vote was to put clearly and unambiguously all commission-paid research on the same footing,O says Robert Braun, director of institutional sales for Midwood Securities, a New York agency brokerage that deals in soft-dollar commissions. OThat means bundled deals by full-service brokers providing proprietary research and independent research providers will be treated equally.O
Says Kristi Wetherington, CEO of Capital Institutional Services, a Dallas-based provider of agency brokerage and independent research, OWeOve been seeing an increased demand from our clients for research from independent firms.O Soft dollars, an entrenched aspect of the buy-side-sell-side relationship, were allowed under a Osafe harborO in Section 28e of the Securities Exchange Act of 1934. But the SEC has struggled with the issue for years; critics say soft dollars amount to nothing more than kickbacks that can force shareholders to pay for conference fees, computers, office administration and other amenities for their fund managers. Some fund managersNnotably Fidelity InvestmentsNhave banned the practice with certain brokers and are paying for research with hard dollars.
The U.K.Os Financial Services Authority put a more restrictive policy into effect in January, and Canadian regulators put out a request for comments...
Read the full article for free courtesy of your local library.
|
Bookmark this article
Print this article
Link to this article
Email this article
Digg It!
Add to del.icio.us
RSS
