SEC OK's Expanded Soft-Dollar Pools

Law360, New York (January 31, 2007, 12:00 AM EST) -- The U.S. Securities and Exchange Commission has given investment bank Goldman Sachs Group Inc. permission to expand its client-commission arrangements to include a wider range of firms.

Client-commission arrangements provide an alternative to more traditional compensation structures, which have increasingly raised ethical concerns.

Currently, mutual funds agree to direct business to a certain firm and pay a higher commission in exchange for information from that firm’s researchers. The practice, known as soft-dollar arrangements, saves the fund cash, but higher commission payments may also mean lower returns...
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