Practice Note 12.20.1 — Soft Dollar Receipts or Payments
|Issue Date||Cross Reference||Enquiries|
1 December 2003.
|Rules 12.20.1 and 12.20.2||
Please contact Member Supervision:
Facsimile No : 6538 8273
E-Mail Address: firstname.lastname@example.org
1.1 Rule 12.20.1 says that a Trading Member and its Trading Representatives may receive goods and services from a broker for directing business to the broker under certain conditions.
1.2 Rule 12.20.2 says that a Trading Member may pay for goods and services to a customer for directing business to the Trading Member under certain conditions.
1.3 This Practice Note provides guidance on the types of goods and services that do not qualify for soft dollar receipts or payments.
2 Good and Services that Do Not Qualify as Soft Dollar Receipts or Payments
2.1 The following goods and services do not qualify as acceptable soft dollar receipts or payments for the purpose of Rule 12.20}:—
(1) Travel, accommodation and entertainment expenses.
(2) General administrative goods and services including office equipment and premises expenses.
(3) Membership fees.
(4) Employees' salaries.
(5) Direct money payment. This does not include payment of referral fees under a referral agreement.
2.2 A Trading Member or its Trading Representative should not receive goods and services from a broker, if the act of it compromises the interest of the customer or may result in the breach of the Rules or other regulatory requirements by the Trading Member or its Trading Representatives.