840 CMR, § 16.05 - Use of Brokers
(1) Retirement
system board members and employees shall not:
(a) direct brokerage commissions for
services, or
(b) instruct its
qualified investment manager or managers to direct brokerage
commissions.
(2)
Selection of brokers shall be based on competitive criteria including best
price and execution.
(3) Commission
rates shall be negotiated.
(4)
Board members shall review on an on-going basis all brokerage costs.
(5) Board members shall review on an on-going
basis the selection of brokers and use of "soft dollars" (arrangements under
which products or services other than execution of securities transactions are
obtained from or through a broker in exchange for the direction of brokerage
transactions to the broker) by its qualified investment manager or
managers.
(6) Board members shall
require the qualified investment manager or managers or brokers to disclose in
writing to the board all commissions charged on all transactions and
investments made.
(7) Board members
shall require the qualified investment manager or managers or brokers to
disclose in writing to the board mark-ups and mark-downs on all trades where
the broker acted as dealer/principal.
(8) Notwithstanding the provisions of
840 CMR 16.00 boards may
participate in so-called "commission recapture" programs provided that such
participation is consistent with the board's fiduciary duty and other
provisions of 840 CMR.
Notes
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