Section 28 E Safe Harbor

Section 28 e of the securities exchange act of 1934 the exchange act provides safe harbor for a money manager to use client commissions to purchase brokerage and research services without.

Section 28 e safe harbor. Safe harbor section 28 e of the exchange act provides a safe harbor from liability for breach of fiduciary duties when advisers purchase brokerage and research products and services with client commission dollars under specified circumstances. Section 28 e provides a safe harbor to money managers including bank fiduciaries who use the commission dollars of their advised accounts to obtain brokerage and investment research services. Safe harbor can also refer to an accounting method that avoids legal or tax regulations or one that allows for a simpler method of determining a tax consequence than the methods described by the.

0 comments add a comment. Section 28 e of the security and exchange act of 1934 permits certain fund management expenses to be covered under a safe harbor provision. Section 28 e provides a safe harbor for any fiduciary that pays up from its fully negotiated commission rate to receive qualifying research or brokerage services from its broker s.

The safe harbor gives fund managers the ability to legally and ethically offset fund management costs using soft dollars. The adviser can use its client s assets for its own benefit without prior consent if it costs the client nothing extra. Section 28 e was enacted by congress in 1975 to provide a safe harbor that protects money managers from liability for a breach of fiduciary duty so long as the adviser could meet a three prong test to determine if the products or services received from a broker dealer falls within section 28 e safe harbor.

The securities and exchange commission is responsible for interpreting and enforcing section 28 e. Section 28 e safe harbor t or f.