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{{a|contract|}} | |||
''For the wonderful world of {{tag|MiFID}} categorisation, and for a convoluted answer to the question “who’s client”? see [[Client - COBS Provision]]'' | |||
A source of far more angst than you would expect amongst the professional classes. An agent is one fellow who represents ''another'' fellow. | |||
===Don’t shoot the messenger=== | |||
When it comes to entering a {{tag|contract}}, an agent enters legal relations on behalf of {{sex|his}} {{tag|principal}} and, in general terms, tries not to take on any personal responsibility {{sex|himself}}. The contract remains between the principal and the third party. | |||
But you soon encounter a thicket of confusion from which you may never emerge and which you will almost certainly regret ever entering. What if the agent doesn't tell the third party who the [[principal]] is? What if the agent doesn't even let on that she’s an agent? | |||
===It takes three to tango=== | |||
The problem is that a contract, by well-trodden legal theory, depends upon the state of mind of two people, whereas where an agency exists, the necessary parts of that consensus can live variously between the minds of ''three''. A may have appointed B, without C knowing. B may have represented to C without A knowing. C and A might not know about each other at all. | |||
In this way it resembles playing {{tag|cricket}} with a [[runner]]. Anyone who has ever done that will know the boundless possibilities for confusion and acrimony it presents. | |||
===At least ''two''=== | |||
From time to time resourceful structurers might try to overcome an accounting problem, or a booking issue between two desks, by interposing an agency arrangement in the middle of a transaction which, otherwise, has the same entity at either end of it. Won’t work. It won’t work even if the agent is a third party — legally, it just vanishes — and it ''certainly'' won’t work if the agent is the same entity as the principal. ''[[Nemo agens in causa sua]]'', as the [[JC]] likes to say. | |||
===[[Capacity and authority]]=== | |||
An agent must, of course, be duly [[capacity and authority|authorised]] by the [[principal]], but how will the [[third party]] know this, without the [[principal]] being there to confirm it? You will hear much talk of [[ostensible authority]]. | |||
An agent has a special relationship with a {{tag|principal}} | |||
===[[Broker dealer]]s=== | |||
An Intermediary acts as True Agent if, acting on Buyer’s behalf, it agrees the purchase of an Asset from Seller by Buyer. | An Intermediary acts as True Agent if, acting on Buyer’s behalf, it agrees the purchase of an Asset from Seller by Buyer. | ||
*True Agent acts at all times on Buyer’s behalf and never in its own capacity. | *True Agent acts at all times on Buyer’s behalf and never in its own capacity. | ||
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*Buyer pays True Agent a Commission calculated on the contract between Buyer and Seller. | *Buyer pays True Agent a Commission calculated on the contract between Buyer and Seller. | ||
=== | ===Asset managers and [[unallocated trades]]=== | ||
{{unallocatedtrades}} | |||
{{Agent representations}} | |||
{{Seealsoagent}} | |||
*{{tag|executing broker}} | *{{tag|executing broker}} | ||
{{ref}} | |||
{{c|brokerage}} | |||