Hedge Funds

SEC aims to clarify soft-dollar rules

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As part of an effort to clarify the ground rules for what is permissible under soft-dollar dealings between brokerage groups and their investment management counterparties, the Securities and Exchange Commission this week issued a guidance release outlining the Commission’s views.

The 49-page report is not the final word on what is allowed and what is not allowed for soft-dollar expensing by hedge funds and other investment managers - as the guidance release will be subject to a 30-day comment period.

But the SEC paper places the highest scrutiny on services paid for by “soft dollaring” where there was