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Broker Commission Agreement
"I need a Broker Commission Agreement for my Hong Kong-based securities trading firm, compliant with SFC regulations, to engage five independent brokers starting March 2025, with tiered commission structures based on transaction volume and specific compliance requirements for derivatives trading."
1. Parties: Identifies the principal and the broker, including their full legal names, registration numbers, and registered addresses
2. Background: Sets out the context of the agreement, including the broker's licenses and qualifications, and the principal's intention to engage the broker's services
3. Definitions: Defines key terms used throughout the agreement, including 'Commission', 'Services', 'Transaction', and other relevant terms
4. Appointment and Scope: Details the formal appointment of the broker and the specific services to be provided
5. Commission Structure: Specifies the commission rates, calculation methods, and payment terms
6. Payment Terms: Outlines when and how commissions will be paid, including payment methods and timing
7. Broker's Obligations: Lists the broker's duties, responsibilities, and service standards
8. Principal's Obligations: Specifies the principal's responsibilities, including providing necessary information and cooperation
9. Compliance: Addresses regulatory compliance requirements, including SFC regulations and AML obligations
10. Term and Termination: Specifies the duration of the agreement and circumstances for termination
11. Confidentiality: Sets out obligations regarding confidential information and data protection
12. Governing Law and Jurisdiction: Specifies Hong Kong as the governing law and jurisdiction for disputes
1. Non-Compete Clause: Restricts the broker from working with competitors, used when dealing with sensitive market segments
2. Performance Targets: Sets specific performance metrics and related commission adjustments, used for performance-based arrangements
3. Sub-Broker Arrangements: Addresses the possibility of engaging sub-brokers, used when sub-brokerage is permitted
4. Insurance Requirements: Specifies required insurance coverage, used for high-risk transactions
5. Marketing and Branding: Guidelines for using the principal's brand, used when broker represents the principal publicly
6. Dispute Resolution: Details mediation or arbitration procedures, used for complex arrangements
7. Force Majeure: Addresses unforeseen circumstances affecting performance, used for long-term agreements
8. Intellectual Property: Covers IP rights and usage, used when proprietary systems or materials are involved
1. Commission Rate Schedule: Detailed breakdown of commission rates for different types of transactions or products
2. Service Level Agreement: Specific performance metrics and service standards
3. Approved Products/Services: List of products or services the broker is authorized to sell/promote
4. Compliance Procedures: Detailed compliance requirements and procedures
5. Required Documentation: Templates and forms for transaction documentation
6. Territory Schedule: Definition of geographical areas or market segments covered
7. Contact Details: Key contact persons and escalation matrix for both parties
8. Commission Calculation Examples: Illustrative examples of commission calculations for different scenarios
Authors
Financial Services
Real Estate
Insurance
Securities Trading
Investment Banking
Commodity Trading
Corporate Finance
Wealth Management
Asset Management
Property Development
Commercial Real Estate
Private Banking
Legal
Compliance
Finance
Sales Operations
Business Development
Risk Management
Broker Relations
Contract Administration
Commission Operations
Regulatory Affairs
Partnership Management
Chief Financial Officer
Legal Counsel
Compliance Officer
Business Development Manager
Sales Director
Broker Relations Manager
Commission Operations Manager
Contract Administrator
Risk Manager
Finance Manager
Operations Director
Regulatory Compliance Manager
Sales Commission Administrator
Partnership Manager
Channel Manager
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