The seismic events surrounding the sinking of Lehman Brothers just over a year ago have shaken the foundations of perceived market standards and left them very unstable. As a result, investment firms have been forced to rapidly redesign and rebuild their processes in many areas. It is worth taking the time to assess how the market has changed the dynamics of commission agreements. Suppose, for example, that an asset manager buys $1,000,000 of Daimler shares and pays a pooled commission of 15 underlyings. In the case of a CSA, the executive broker keeps 5 Bps or US$500 in commission, while the remaining $1000 is put into a jar of CSA. The asset manager can then pay each of its research providers on the funds accumulated in its CSA pot. CSA= Commission Sharing Agreement between a buy-side company and a broker. What are the exact mechanisms when a trade is executed and there is a CSA? And what does MIFID II propose instead of a CSA aggregate? In the past, banks and brokers have offered additional services to the buy-side business to advance execution activities. The commission rate for the execution of a share trade was an all-in-game rate and, while CSAs followed part of the trajectory of calculating a research fee, they were not generally accepted. The consequences of registering a broker-dealer as an investment advisor are numerous; However, one of them is particularly characterized by brokers dealers who also act on an owner`s basis.

§ 206, para. However, in the absence of adequate operational support, this reduction in credit risk may be accompanied by a significant increase in operational risk. Bill George`s comment: According to this interpretation, can an investment advisor or investment fund order that part of its commissions be donated to its research department? Would this then be disclosed as a credit on administrative costs? And if the advisor`s son-in-law has a great idea for shares, can the advisor have his son-in-law send part of his commissions in exchange for tipping? According to a client agent of attorneys Larry E. Bergmann (formerly SEC) and Roger D. Blanc of the law firm Willkie Farr & Gallager, the situation has been clarified. . . .