Soft Dollar Policy - Clarifications

I need some clarification on this. My understanding is as follows: A company is allowed to have a soft dollar agreement with a trading firm, for example, to process all their client trades as long as the benefits of that agreement accrue back to the clients directly involved in those trades. In addition, this agreement must be disclosed ahead of time to the client. If the soft dollar arrangement does not benefit ALL the clients whose trades are part of the agreement, it’s a violation of the code. Also, if a client requests that his trades go to a specific broker, your duty is to inform the client whether not they are getting best execution available but if client still would like to use that brokerage, you’re not in violation if you proceed with the trades. Did I get it right and am I missing anything?

I htihk you’re spot on.

Soft dollars must be used to benefit the client(s). I think if you use soft dollars to benefit one set of clients over others, it’s still a violation, but it’s fair dealing issue, more than a soft dollar issue.

you can use a clients soft dollars for another client “IF” it will benefit the client in the long run somehow. Just remember that you can’t go buying TVs and Alcohol and Wii’s with client soft dollar.s

Uhhhhhh ohhhhhhhhhhh

What if you give the Wii to the client (after having your kid test it for defects, of course) :wink:

that’s allowed