Broker To Broker Commission Agreement for Malta

Broker To Broker Commission Agreement Template for Malta

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Broker To Broker Commission Agreement

"I need a Broker to Broker Commission Agreement for a real estate brokerage firm in Malta collaborating with an international property broker, with a focus on luxury properties and a 60-40 commission split structure, to be effective from March 2025."

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What is a Broker To Broker Commission Agreement?

The Broker To Broker Commission Agreement is essential for establishing formal collaboration between brokerage firms operating under Maltese jurisdiction. This document is typically used when two or more brokers wish to formalize their commission sharing arrangements, whether for client referrals, shared services, or joint business ventures. It encompasses crucial elements such as commission structures, payment terms, regulatory compliance requirements (including MFSA regulations and EU directives), and operational procedures. The agreement is particularly important in Malta's financial services sector, where strict regulatory oversight requires clear documentation of inter-broker relationships. It addresses key aspects such as data protection under GDPR, anti-money laundering compliance, and specific financial services regulations, while providing flexibility to accommodate various types of brokerage services and commission arrangements.

What sections should be included in a Broker To Broker Commission Agreement?

1. Parties: Identification of the participating brokers, including full legal names, registration numbers, and registered addresses

2. Background: Context of the agreement, brief description of each broker's business, and purpose of the collaboration

3. Definitions: Detailed definitions of key terms used throughout the agreement, including 'Commission', 'Clients', 'Services', 'Territory', etc.

4. Scope of Agreement: Defines the nature of the relationship between the brokers and the territorial scope of their collaboration

5. Commission Structure: Details of commission rates, calculation methods, and payment terms

6. Payment Terms: Specifics about payment timing, currency, method of payment, and handling of taxes

7. Obligations of the Parties: Detailed responsibilities and duties of each broker, including regulatory compliance requirements

8. Regulatory Compliance: Commitments to comply with relevant laws, including AML, financial services regulations, and data protection

9. Confidentiality: Provisions for handling confidential information and client data

10. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

11. Dispute Resolution: Procedures for handling disputes, including jurisdiction and applicable law

12. General Provisions: Standard clauses including notices, amendments, assignment, and severability

What sections are optional to include in a Broker To Broker Commission Agreement?

1. Non-Competition: Restrictions on competing activities, used when brokers want to prevent direct competition in specific markets

2. White Labeling: Terms for using each other's branding, included when one broker's services are marketed under the other's brand

3. Service Level Agreement: Specific performance metrics and standards, included for complex operational relationships

4. Insurance Requirements: Specific insurance obligations, included when dealing with high-value transactions or specific risks

5. Marketing and Promotion: Terms governing joint marketing activities, included when brokers plan collaborative promotional efforts

6. Data Processing Agreement: Detailed GDPR compliance terms, required when significant personal data processing is involved

7. Force Majeure: Provisions for unforeseen circumstances, particularly relevant in volatile markets or uncertain conditions

What schedules should be included in a Broker To Broker Commission Agreement?

1. Schedule 1 - Commission Rates: Detailed breakdown of commission rates for different types of transactions or services

2. Schedule 2 - Territory Definition: Specific geographical areas or markets covered by the agreement

3. Schedule 3 - Service Specifications: Detailed description of services covered under the agreement

4. Schedule 4 - Compliance Procedures: Specific procedures for ensuring regulatory compliance

5. Schedule 5 - Reporting Templates: Standard formats for regular reporting between parties

6. Appendix A - Required Licenses: Copies or details of regulatory licenses held by each party

7. Appendix B - Contact Details: Key contact information for both parties, including escalation procedures

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Insurance

Real Estate

Investment Banking

Commodity Trading

Securities Trading

Foreign Exchange

Maritime Services

Gaming Industry

Investment Services

Commercial Property

Business Consulting

Relevant Teams

Legal

Compliance

Finance

Operations

Business Development

Risk Management

Regulatory Affairs

Partnerships

Contracts Administration

Executive Leadership

Treasury

Account Management

Relevant Roles

Chief Executive Officer

Managing Director

Compliance Officer

Legal Counsel

Business Development Manager

Finance Director

Operations Manager

Risk Manager

Broker

Senior Broker

Commission Manager

Regulatory Affairs Officer

Partnership Manager

Contract Manager

Chief Financial Officer

Head of Compliance

Director of Operations

Industries
Financial Services Act (Chapter 330 of the Laws of Malta): Primary legislation governing financial services in Malta, establishing licensing requirements and regulatory framework for brokers and financial intermediaries
Trading Licenses Act (Chapter 441 of the Laws of Malta): Regulates commercial brokers and intermediaries, setting out requirements for operating as a broker in Malta
Civil Code of Malta (Chapter 16): Contains fundamental principles of contract law and commercial intermediation, including rules on formation of contracts, obligations, and commission agreements
Malta Financial Services Authority Act (Chapter 330): Establishes the MFSA as the primary regulatory body and its powers in overseeing financial services including brokerage activities
Prevention of Money Laundering Act (Chapter 373): Sets out anti-money laundering obligations for financial intermediaries, including customer due diligence and reporting requirements
GDPR and Data Protection Act (Chapter 586): Governs the processing and sharing of personal data between brokers, ensuring compliance with EU data protection standards
Investment Services Act (Chapter 370): Regulates investment services and collective investment schemes, relevant if the brokerage involves financial instruments
Companies Act (Chapter 386): Relevant for corporate governance and business organization aspects of brokerage firms
MiFID II Implementation in Malta: EU regulations implemented in Malta governing financial instruments markets and intermediary services
Value Added Tax Act (Chapter 406): Governs VAT implications of commission payments and brokerage services in Malta
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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