Hello Mary:

About your question, here I have an explanation in Spanish: “comisiones pagadas por operación bursátil que no se reportan directamente, se incluyen en general como honorarios”. The “hard dollars” are also commissions that have to be reported directly.

This is the explanation of: www.investopedia.com: with the definition of “Soft Dollars”:
A means of paying brokerage firms for their services through commission revenue, as opposed to through normal direct payments (hard dollar fees).

And this is also an example of the www.investopedia.com: “For example, a mutual fund may offer to pay for research from a brokerage firm by executing trades at the brokerage. Let's say that Large-Cap Value Fund (LCV) wants to buy some research from XYZ Brokerage Firm. LCV may agree to spend at least $10,000 in commissions for brokerage services in return for research from XYZ. This would represent a soft dollar payment. Alternatively, if LCV wanted to simply buy the research from XYZ and not agree to any kind of soft dollar fee, it might have to pay the brokerage firm $7,000 in “hard dollars” (cash) for the service.”

Also this is a good explanation of: Ask Jeeves :
“Soft dollars is a term used in finance to describe the commission generated from a trade or other financial transaction between a client and an investment manager.[1] A soft dollar arrangement is one in which the investment manager directs the commission generated by the transaction towards a third party or in-house party in exchange for services that are for the benefit of the client but are not client directed.[2] Soft dollars, in contrast to hard dollars (actual cash), which have to be reported, are incorporated into brokerage fees and paid expenses, which may not be reported directly. Registered Investment Companies generally comply with the limitations detailed in Section 28(e) of the Securities Exchange Act of 1934 but hedge funds, which are generally not registered, are not subject to the limitations of Section 28(e) and thus the client commissions are not necessarily used for the direct benefit of the client.


I hope this analysis helps you in your work.

Domingo