3CL Travers Smith Seminar: '"Nobody is Proud of Soft Dollars": A Critical Review of Excess Brokerage Commissions in the United States and the Significance of Recent MiFID II Reforms in the European Union'

Speaker: Professor Howell E. Jackson (Harvard Law School)

Abstract: Since 1975, investment advisers in the United States have been permitted to pay excess brokerage commissions on securities transactions and then utilize those excess payments – commonly known as “soft dollars” – to purchase research and related services, thereby subsidizing the investment advisers’ own profit margins. Over the past four decades, the SEC has made fitful efforts to curtail the practice and enhance the transparency of soft dollar payments, but the Commission has been routinely thwarted by a financial services industry that profits from soft dollars and strives to keep the payments obscure and undiminished. In the past few years, financial authorities in the EU and the UK have taken a fresh look at excessive brokerage commissions under MiFID II and are moving towards regulatory reforms that force the unbundling of commission charges in a manner that is likely to make this aspect of their financial markets much more investor-friendly than U.S. markets and arguably more efficient as well. The emergence of new international standards for the oversight of soft dollar payments presents challenges to firms in the financial services industry that increasingly will need to comply with conflicting legal regimes across national boundaries.

3CL runs the 3CL Travers Smith Lunchtime Seminar Series, featuring leading academics from the Faculty, and high-profile practitioners. For more information on past events including recordings, please refer to the Centre activities page.

**Please note: Due to place restrictions, participation in this seminar exceptionally requires registration.**

Lunch will be available beforehand. There is no charge for lunch or to attend the seminar.

Enquiries to: 3cl@law.cam.ac.uk