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Non-Tech : Datek Brokerage $9.95 a trade
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To: Jon Tara who wrote (6186)12/6/1997 12:35:00 PM
From: Dirk Hente  Read Replies (1) of 16892
 
There is a SEC rule about 'Payment for Order Flow':
This rule require enhanced disclosure of payment for order flow practices on customer confirmations, and account statements, as well as upon opening new accounts, see:

sec.gov

i rechecked all my datek order confirmations. almost all orders are indicated as cross transactions where DATEK acted as principal ( for the rest of my trades as agent)

i did the same check for my other trading account and found out that LOMBARD was acting only as agent.

both fatcs are telling me that there seems to be no difference for me as the customer whether the broker acts as a principal or as an agent.
at least as long as they dont work for a price improvement.

one final remark (citing from the oabove mentioned sec rule):
broker/dealers have the duty to seek to obtain best execution of customer orders. this duty derives , in part, from the common law agency duty of loyalty, which obligates an agent to act exclusively in the principal's best interest (Restatement 2d Agency 387 (1958)). Thus, when an agent acts on behalf of a customer in a transaction, the agent is under a duty to exercise reasonable care to obtain the most advantageous terms for the customer.

but i know its just wishful thinking to believe in this.
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