Interpositioning

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Interpositioning

The practice of using a second broker in a securities transaction, which is considered illegal it is if used to generate additional commission.

Interpositioning

The act or practice of adding another broker-dealer to a transaction when there is no reason to do so and the extra broker-dealer does not provide a necessary service. Generally speaking, interpositioning occurs when two broker-dealers agree to insert the one into the dealings of another. This allows both to extract commissions without doing any work; obviously this is detrimental to the client because it forces him/her to pay money he/she does not need to pay. Interpositioning is illegal under the Investment Company Act of 1940, but it still occurs. Indeed, it was relatively common during the first few years of the 2000s.

interpositioning

The involvement of a third party between a broker-dealer and the best available market price that results in the customer paying a bigger markup or markdown than would have been the case if the third party had not been present. For example, Dealer A satisfies a customer order to buy a security by purchasing the security through Dealer B who in turn purchases the security from the market maker. Dealer B marks up the security to Dealer A, who then marks up the security again when selling it to the customer. Interpositioning is considered unethical by the National Association of Securities Dealers.
References in periodicals archive ?
The interpositions of the People's Assembly members focused on providing citizens' necessities and needs, combating terrorism, preserving security and safety, expediting national reconciliation, and healing wounds and closing rifts.
In their interpositions , the participants made a number of proposals and views aimed at creating the appropriate atmospheres to ensure the success of the dialogue.
Later, Members of the People's Assembly presented their interpositions concentrating on the political, economic and service situation and the procedures by the government to ease the repercussions of the crisis that Syria passes through.
Interpositions by the Assembly members touched on the need to support farmers during these difficult economic conditions, calling for resolving the various economic and services issues affecting Aleppo province.
AaAaAaAa The conference will discuss new strategies of rehabilitation and training of documents and archives' specialists for the 21st century through a number of interpositions at the general session and the conference's sideline sessions.
The families' interpositions focused on easing the suffering of the martyrs' families and establishing an anti-terrorism court in Lattakia province and other issues related to the compensating the families for the damage caused by the armed terrorist groups.