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The Coming Changes For Soft Dollars: Regulatory Reforms Are Afoot, But How Much?

Traders Magazine, August 2003

Nina Mehta

The massive flow of soft-dollar commissions continues to rile regulators and some investors. The source of the controversy is the big money paid for executions by many institutional money managers to Wall Street's trading firms. A percentage of the commission pays for execution, but a large proportion does not: It is "softed" to purchase research and other services for institutional customers. Now there's a movement to rein in these soft-dollar payments, according to Jay Baris at the securities industry law firm of Kramer Levin Naftalis & Frankel. The regulators thought the "time hasn't been right" until recently to do anything, Baris said.

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