Can some one give a laymans explaination of both and how they relate to CFA soft dollar standards? thanks…
basically you are allowed to use both brokerage from principal trades and agency trades to obtain research for other clients accounts…but there are two things you need to remember. 1. For Agency Trades: It is permissible to use client brokerage from agency trades to obtain research which may not directly benefit the client. Over time, however, the client should receive a benefit from the research. 2. For Principal Trades: As long as no fiduciary regulations apply, it is permissible to use client brokerage obtained from principal trades to benefit other client accounts, as long as this is disclosed to the client and prior consent is received.