Section 28(e): Pressure growing for tighter soft-dollar rule; Agency could return to pre-1986 definition to curb most abuses, MFS' Pozen predicts.(News)

Pensions & Investments, April, 2004 by Anand, Vineeta

Byline: Vineeta Anand WASHINGTON - The Securities and Exchange Commission loosened the definition of soft dollars in 1986, and now the push is to go back to the pre-1986 definition. After Congress abolished fixed commission rates in May 1975, the SEC granted a limited protection to money managers that paid brokerage firms higher commissions than they might otherwise obtain if they received investment research and related investment management services not readily available for cash in return.

In 1986, the SEC expanded that protection to include "legitimate'' brokerage services. Since then, however, the SEC has struggled to control the use of soft dollars to pay for rent, travel expenses, daily newspapers, computers and other routine business expenses that...

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