Commission: Difference between revisions
Jump to navigation
Jump to search
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 2: | Line 2: | ||
===Rationale=== | ===Rationale=== | ||
*Agency “commission”: In a pure [[agency]] contract, there is no direct [[transaction]] between [[agent]] and [[principal]], so the only way the agent can be remunerated is by a separate “agency fee”: this is a “commission” calculated on the value of the transaction between Street and the Customer directly to which the agent is not a party. | *'''Agency “commission”''': In a pure [[agency]] contract, there is no direct [[transaction]] between [[agent]] and [[principal]], so the only way the agent can be remunerated is by a separate “agency fee”: this is a “commission” calculated on the value of the transaction between Street and the Customer directly to which the agent is not a party. | ||
*[[Riskless Principal]] compensation: In a riskless principal structure there are two contracts: one between Street and Dealer, and between Dealer and Principal. Therefore Dealer may extract a fee by: | *'''[[Riskless Principal]] [[compensation]]''': In a [[riskless principal]] structure there are two contracts: one between Street and Dealer, and between Dealer and Principal. Therefore Dealer may extract a fee by: | ||
**'''Mark-up/Mark-down''': imposing a mark up/mark down between the two contracts; OR | **'''Mark-up/Mark-down''': imposing a mark up/mark down between the two contracts; OR | ||
**'''Fee''': separately charge a fee, which may be labelled a “commission”. | **'''Fee''': separately charge a fee, which may be labelled a “commission”. | ||