Definition of commission-sharing arrangements CSAs

Often closely associated with client-commission arrangements (CCAs), commission-sharing arrangements (CSAs) are a form of soft dollar arrangement between a U.S. fund advisor and a broker.

This type of arrangement rose to prominence in 2006 after the SEC adopted interpretive soft dollar guidance noting that brokers in step-out arrangements do not need to perform certain duties. In a CSA, a fund company negotiates with a brokerage house to pay a base execution rate for all its trades. Another portion is then set aside for research. The research portion is collected in a pool to be used to pay for research as directed by the mutual fund firm. [1]

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