ABC Agreement

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ABC agreement

A contract between an employee and a brokerage firm outlining the rights of the firm purchasing an NYSE membership for that employee.

ABC Agreement

An agreement between a member of the New York Stock Exchange and the company for which the member works. The agreement contains three stipulations (referenced in the eponymous "A-B-C"). The first stipulation allows the member to transfer ownership of the seat to another employee of the company. The second allows the member to purchase a second seat on the trading floor on behalf of another employee of the company, while still maintaining ownership of the first seat. The third states that if the member sells the seat, he/she must give the gain to the company. An ABC agreement exists because members represent the companies that employ them (and the companies buy the seats for them), but they are recognized by the NYSE as independent. The agreement protects the company in case the employee ever leaves to go to another firm. The ABC agreement must be entered with the consent of the NYSE.

ABC Agreement

An agreement between a firm that finances a seat on the New York Stock Exchange and the employee who purchases the seat. The agreement, approved by the exchange, permits the member to transfer the seat to another employee of the member firm, keep the seat and purchase a second membership for another individual designated by the lending firm, or sell the membership with proceeds given to the member firm. ABC Agreements are used because of an exchange restriction prohibiting organizations from becoming members.
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With NBC and ABC agreements in hand, Mfume has taken the first steps in his promise to change the face of television.
The ABC agreement came on the heels of a recent agreement signed with NBC President Bob Wright.