Commission: Difference between revisions
Jump to navigation
Jump to search
Amwelladmin (talk | contribs) (Created page with "Commission is only relevant to an Agency contract. Where a broker acts as Riskless Principal (or any other kind of Principal) there is NO commission: the payment...") |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 1: | Line 1: | ||
Commission is only relevant to an [[ | Commission is only relevant to an [[agency]] contract. | ||
Where a broker acts as [[ | Where a broker acts as [[riskless principal]] (or any other kind of [[principal]]) there is NO commission: the payment we ''call'' a “[[commission]]” is really just an additional [[fee]]. | ||
For example, a real estate [[agent]] arranges a transaction between buyer and seller and is not in the contractual chain itself. Therefore one pays the purchase price to the seller, but the commission to the agent - look upon it as a derivative of the purchase price, even — though honestly that is slightly stretching the {{tag|metaphor}}. | |||
if you have legal, regulatory or — gasp — tax reasons for not wanting to have anything to do with a principal contract between your swap counterparty and its hedge counterparty, best call the amount you pay to your swap counterparty as consideration for its agreeing to put o the trade as a fee not a commission. | |||
[[Amwell J|My]] own view is that “a rose is a rose, and by any other name smells just as sweet” - but tax lawyers aren't so well read. | |||
Rationale: | Rationale: | ||