The Study of Soft Dollar in the Finance Industry

• Main Authors: Hui-Chen Chen, 陳慧珍
• Other Authors: Tzu-Kuan Chiu
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/60421313740379428465

碩士 === 國立中央大學 === 財務金融學系碩士在職專班 === 98 === This essay first analyzes the literature about soft dollars in order to dissect if the relationship and the stakes between foreign financial analysts, fund managers and brokers indirectly affect the investment quality of the investors. At the same time examine the sale dispute (which involved the commissions the brokers offer to the financial institutions, the so called ‘soft dollar’) derived from improper sales of overseas structured products caused by the bankruptcy of Lehman Brothers in 2008, which trigger the global financial tsunami. The regulation about soft dollar under the US Securities & Exchange Commission (SEC)28(e) is mere formality. The brokers in Taiwan provide soft dollar in various forms. Next, examining the advantages and disadvantages of soft dollars has lead to the result that although soft dollar had provided the additional channel for bonus to fund managers, it also showed a positive correlation with the fund performance. Therefore, it gave fund managers a motive towards a more aggressive management. Finally, considering there are domestic and international ruling cases against acceptance of soft dollar for it endangers the investor’s interest, it is highly recommended to have an executable financial legal system with the investors’ rights and welfare in mind and avoid falling into moral crisis.