What does safe harbor mean in business and finance?
In: Economics
It is a established regulatory carve out. So an activity will be prohibited unless it is within the safe harbor guidelines. Then the prohibited activity is permitted. An easy example is soft dollars under section 28E of the Exchange Act is 1934. Rule is gotta get best execution. Safe harbor would be slightly more than “best” price can be incurred on execution of trades if it is for specific brokerage or research services as described in letters outside of the regulation (the safe harbor)
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