Is the spread earned by a broker on principal transactions involving the plan eligible indirect compensation?
No. For this purpose, the Department will follow the definition of commission used by the Securities and Exchange Commission under Section 28(e) of the Exchange Act as described in SEC Release No. 34-45194. Thus, securities commissions for Schedule C purposes would include a markup, markdown, commission equivalent, or other fee paid by a managed account to a dealer for executing a transaction where the fee and transaction price are fully and separately disclosed on the confirmation and the transaction is reported under conditions that provide independent and objective verification of the transaction price subject to self-regulatory organization oversight. Fees paid for eligible riskless principal transactions that are reported under NASD Rule 4632, 4642, or 6420 would fall within this interpretation.
Related Questions
- How is Final Average Compensation (FAC) determined for individuals who are not eligible employees and Plan members (or former Plan members) on December 31, 2004?
- Is the spread earned by a broker on principal transactions involving the plan eligible indirect compensation?
- How will a broker know if a plan is eligible for the subsidy?
