5/17/2010
The biggest risk for firms when it comes to soft dollars is failing to disclose they engage in these arrangements when they do. Compliance staff need to be aware of potential arrangements that could qualify as soft dollars - and know they don't always have to be in writing to qualify.Take when a por ...
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05/01/2010
Click here to open a Word file that is an example of a compliance training tool used by one of your peers. This one covers books and records, proxy voting, anti-money laundering, best execution, and best custody.
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04/12/2010
Click here to open an Excel worksheet designed to track the top 10 brokers selected for best execution purposes, including listing soft dollar percentages and average commission per share.
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03/29/2010
Click here to see a Word document prepared by Steve Stone, a partner at Morgan Lewis in Washington, on soft dollars guidance for RIAs.
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11/30/2009
FINRA has come down hard on a broker for more than $1 million in improper soft dollar payments, including $13,700 for a hedge fund manager to visit a "gentlemen's club" seven times over 14 days. Three employees of broker TerraNovaFinancial in Chicago have been sanctioned over the misuse, including i ...
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10/26/2009
The notion of "mixed use" under soft dollars dates to 1986, although some firms remain confused about what fits within the safe harbor. Ironically, some of the SEC's clearest guidance for investment advisers centers on this issue.The bible on the subject is the SEC's 2006 release, but if you feel it ...
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10/22/2009
Examples of Form ADV Part II disclosures regarding soft dollars, courtesy of Fifth Third Asset Management in Cincinnati.
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8/31/2009
Here's the scenario. Your firm serves as a sub-adviser on a wrap program's large cap portfolio. The sponsor of the wrap program forbids the use of soft dollars. Yet other clients to whom you manage large cap securities allow soft dollars research - and some of their research seeps over to the wrap p ...
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7/20/2009
Be cautious about accumulating too large a pool of soft dollar credits. You could see them vanish in a flash, or be accused of not satisfying the safe harbor exception under Exchange Act section 28(e).The safe harbor carries the expectation that an adviser will "make a good faith determination" to ...
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11/24/2008
Soft dollars can be such a bear that it may seem a 12-month job just to maintain a handle on their use. One CCO has set up a series of tests, sprinkled across four quarters, that he believes helps his firm ensure its use of soft dollars stays within the safe harbor.James Mautino, CCO, Fifth Third As ...
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