Agency Cross


DEFINITION of 'Agency Cross'

A transaction in which an investment adviser acts as the broker for both his client and the other party to the transaction. Investment advisers are not required to obtain the client's consent for each individual agency cross transaction, but must have the client's prior consent to engage in such transactions.

BREAKING DOWN 'Agency Cross'

As in all transactions, advisers are required to obtain the best possible price and execution in agency cross transactions. If an affiliate of the adviser brokers such a transaction, it is still considered an agency cross transaction, just as if the adviser had brokered it. Agency cross transactions are governed by Rule 206(3)-2 of the Investment Advisers Act of 1940.

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