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Agent

• The decision-maker in a principal-agent relationship.

• Is a party who acts on the behalf of another. This occurs when a broker executes a trade for the benefit of the customer. Here, the broker receives a commission. This compares to a dealer transaction.

•  See Broker-Dealer.

• A firm that executes orders for or otherwise acts on behalf of another (the principal) and is subject to its control and authority. The agent may receive a fee or commission.

 
 Embedded terms in definition
 Broker
Commission
Control
Dealer
Firm
Its
Subject
Trade
 
 Referenced Terms
 Account executive: Is the party who acts as an Agent for his customer. The broker receives a commission as compensation. This person may also participate in spreads or other fees which generate revenue for the firm. This person is also known as an Associated Person (AP), Investment Executive (IE), Registered Representative (RR), Registered Customer Support Person or Securities Salesman. Brokers are required to be licensed according to product lines and states when required.

 Agency bank: A form of organization commonly used by foreign banks to enter the U.S. market. An agency bank cannot accept deposits or extend loans in its own name; it acts as Agent for the parent bank.A form of organization commonly used by foreign banks to enter the U.S. market. An agency bank cannot accept deposits or extend loans in its own name; it acts as an Agent for the parent bank. Term often used on the Street to refer to both foreign bank agencies and branches.

 Agency bank: A form of organization commonly used by foreign banks to enter the U.S. market. An agency bank cannot accept deposits or extend loans in its own name; it acts as Agent for the parent bank.A form of organization commonly used by foreign banks to enter the U.S. market. An agency bank cannot accept deposits or extend loans in its own name; it acts as an Agent for the parent bank. Term often used on the Street to refer to both foreign bank agencies and branches.

 Agency costs: The incremental costs of having an Agent make decisions for a principal.Costs borne by shareholders to prevent or minimize agency problems and to contribute to the maximization of the owners' wealth. They include monitoring and bonding expenditures, opportunity costs, and structuring expenditures.

 Agency theory: The analysis of principal-Agent relationships, wherein one person, an agent, acts on behalf of anther person, a principal.

 
 Related Terms
 Principal agent relationship
Transfer agent

<< Agency theory Aggregation >>

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