Soft Dollar/Client Commission Arrangements
The SEC has indicated an intention to address the subject of the transparency/disclosure of soft dollar/client commission arrangements, and it appears that the focus will be on disclosure by asset managers to their "clients." Therefore, the SIFMA Soft Dollar Transparency Working Group ("Working Group") is seeking to develop, and possibly recommend to the SEC, an alternative transparency regimen. In that regard, the Working Group has reviewed a number of mutual fund SAIs, and noted that although not required by any current regulation, we are aware of several that contain informative discussions regarding soft dollar/client commissions arrangements in which the fund manager participates. Common elements of these disclosures include:
- Criteria for selecting executing brokers.
- Policies for dealing with affiliates in terms of brokerage execution.
- Description of the nature of the research and brokerage services received .
- Disclosure that more than lowest commissions may be paid and rationale for doing so. Reference to mixed use products and services and the allocation process.
- Discussion of potential conflicts, such as instances where client commissions paid by one account may benefit different accounts.
- Policy regarding whether the fund obtains products/services within Section 28(e).
The initial thinking of the Working Group is that the above information is readily available to both fund and non-fund managers and is the type of information that would be meaningful to clients. Accordingly, the Asset Management Group of SIFMA is seeking input regarding this matter from asset management professionals which we would share with the Working Group. Please send your input on this matter to Joseph Sack at jsack@sifma.com.
AMF Members Meeting and New Opportunities with Prime Brokerage
The Asset Managers Forum will host its Member Meeting on Friday, February 9, 2007. At this business meeting of the Forum, a representative of Morgan Stanley will offer a presentation on how the prime brokerage business relates to the traditional asset management business in today's marketplace. Today, prime brokers are adding services that are relevant to the securities processing business. All AMF members and associate members are invited to participate in this business meeting. If you are interested in receiving the meeting notes of this meeting, please contact Douglas Taggart of the staff at dtaggart@sifma.org.
Click here to view full agenda of AMF Members Meeting and to register.
This business meeting will also cover topics on corporate actions, fails management, STP, insourcing/outsourcing, DTCC's Trade Information Warehouse and an update on the activities of the Asset Management Group. New Steering Committee members will also be elected.
Workshop for Investment Managers and Custodians
