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Quantitative Finance · Glossary

What is Commission sharing agreement, research unbundling?

Also known as: commission sharing agreement · research unbundling

Definition 20.5 Microstructure and Execution · Chapter 20 — The Buy-Side Trading Desk and Its Brokers

A commission sharing agreement lets a fund pay commissions to an executing broker and direct part of them to other firms that provide research. Research unbundling separates the payment for research from the payment for execution, so that each is priced and chosen on its own.

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