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Soft Dollars Are Targeted

Traders Magazine, February 2004

Gregory Bresiger

Soft dollars and directed brokerage would be ended under the provisions of a comprehensive mutual fund fees reform bill, which was recently introduced in the U.S. Senate. "Soft dollars distort the markets both in trade executions and products and services purchases because there is little or no meaningful price negotiation or competition in these areas," according to S2059 sponsor Sen. Peter Fitzgerald (R-Illinois). Fitzgerald, who is also pushing in this bill for the elimination of 12b-1 fees, complains the distortion comes because brokerage costs are not included in the mutual fund expense ratio.

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