A US Securities and Exchange Commission policy giving US brokers and asset managers relief from an EU rule requiring disclosure of investment-research costs could worsen conflicts of interest from “soft dollar” commissions, research firm Morningstar said.
The Chicago-based firm said the SEC’s temporary exemption allows global investment managers to charge their US clients more than those in Europe.
The SEC relief allows US funds to continue using trading commissions to pay for research from brokers through soft-dollar arrangements. The undisclosed research costs are passed on to US customers.
Funds can still exploit US investors under SEC `soft dollar’ policy, Morningstar says
19 April 2019 10:35pm