Finance: What is an Agency Cross Transaction/Trade?

What is an Agency Cross Transaction/Trade? An agency cross trade happens when the advisor is the broker for the clients on both sides of a trade. Advisors have to give their clients warning if they plan to engage in this type of trading activity, as he is the one doing the buying and selling in the transaction.

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Transcript

00:27

disclosure it has to be made to both sides as to what's going on..why is this

00:32

such a big deal well because there isn't another set of eyes through a [Man peers through a curtain]

00:36

competitive agency looking in on this deal to be sure that fair market

00:40

practices are being applied and you know fair prices are being paid and this kind

00:45

of insider dealing happened a lot before the 1940 investment advisors Act was [Men shaking hands]

00:50

brought into place by the SEC which stipulated all kinds of rules and

00:54

regulations to help you know the unfavored little guy not get totally [Screw and shadow of drill appears]

00:59

screwed